web
You’re offline. This is a read only version of the page.
close
Skip to main content
Community site session details

Community site session details

Session Id :
Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Cost Center - Dimensio...
Small and medium business | Business Central, N...
Answered

Cost Center - Dimension or cost accounting?

(0) ShareShare
ReportReport
Posted on by MahGah 15,527

Hi 

In general when client should use cost accounting for cost center and when it is enough to use dimension? 

So far I thought dimension is enough for cost center but I noticed cost accounting function in BC and now I am not sure which one should be utilize to capture cost center expense, etc. 

Any explanation here can help a lot.  

I have the same question (0)
  • Suggested answer
    Inge M. Bruvik Profile Picture
    Inge M. Bruvik 1,043 Moderator on at
    RE: Cost Center - Dimension or cost accounting?

    I think that the main difference between dimensions and cost accounting is the need for a complex mechanism for allocating cost.

    When you use cost accounting you can define cost objects and define dynamics or static rules for allocating cost based on these rules.

    And again that gives you more flexibility when it comes to your reporting. But the flexibility comes with a cost of maintaining cost accounting and cost allocation.

    When you only use dimensions you have a more manual way of allocating cost and income to each dimension value.  

    In the cases i have been working with over the year - dimensions have always been sufficient. So i have very rarely seen anyone use parts of the cost accounting and even more rarely seen anyone using the full blown cost accounting functionality.

    So my starting point is always to use dimension for as much as possible.

    learn.microsoft.com/.../finance-define-and-allocate-costs

  • Verified answer
    YUN ZHU Profile Picture
    YUN ZHU 92,762 Super User 2025 Season 2 on at
    RE: Cost Center - Dimension or cost accounting?

    Hi, just adding some info.

    The following diagram shows the workflow in cost accounting.

    https://learn.microsoft.com/en-us/dynamics365/business-central/finance-about-cost-accounting#workflow-in-cost-accounting

    costaccountingoverview.png

    And the video below briefly explains the usage.

    https://www.youtube.com/watch?v=cXrLtGwmKn4

    And info from https://www.erpsoftwareblog.com/2021/02/cost-accounting-in-dynamics-365-business-central-profit-analysis/

    The key benefits of the Dyn365BC cost accounting module include:

    • You can analyze the end-to-end business cash flow
    • It enables you to allocate costs based on the cost rates or consumers
    • Entails easy-to-use and flexible cost allocation schemes
    • Ability to perform different versions of cost analysis parallelly for actual, simulated, projected, or future periods or strategies
    • Helps fulfill reporting requirements for both consolidated and analytical reporting

    Thanks.

    ZHU

  • MahGah Profile Picture
    MahGah 15,527 on at
    RE: Cost Center - Dimension or cost accounting?

    Dear Mr Bruvik

    Thanks for the detailed answer. This was really helpful to know that it is a rare case use for cost accounting. Thank you so much.

  • MahGah Profile Picture
    MahGah 15,527 on at
    RE: Cost Center - Dimension or cost accounting?

    As always thanks Mr Zhu for providing more details here. This was really helpful

Under review

Thank you for your reply! To ensure a great experience for everyone, your content is awaiting approval by our Community Managers. Please check back later.

Helpful resources

News and Announcements

Join experts in person to explore low code and AI agents at the Power Platform Community Conference sponsored by Microsoft

Quick Links

Responsible AI policies

As AI tools become more common, we’re introducing a Responsible AI Use…

Abhilash Warrier – Community Spotlight

We are honored to recognize Abhilash Warrier as our Community Spotlight honoree for…

Congratulations to the September Top 10 Community Leaders!

These are the community rock stars!

Leaderboard > Small and medium business | Business Central, NAV, RMS

#1
Rishabh Kanaskar Profile Picture

Rishabh Kanaskar 4,327

#2
Sumit Singh Profile Picture

Sumit Singh 2,734

#3
Nimsara Jayathilaka. Profile Picture

Nimsara Jayathilaka. 2,599

Last 30 days Overall leaderboard

Featured topics

Product updates

Dynamics 365 release plans