Cost Centres

Overview#

• Cost Centres calculate production Hourly Rates using Overheads, Equipment, Labour, Maintenance Costs and Productivity of the Cost Centre.
• Cost Centre statuses can be Pending, Active or Cancelled. Although all the Cost Centres appear in lookups, only Active Cost Centres (black) can be selected. Warnings appear in the Items and Pricing modules to identify Cancelled Cost Centres.
• Overheads, from Active Cost Centres, are automatically apportioned according to the total cost of the Cost Centre. This allocation can be overridden.
• The assigned costs can be captured by week, month or year. These costs are converted to a monthly cost and then to an hourly rate based on productivity: hours worked per week and productive weeks per annum.
• The Hourly rate can be manually set by checking the Fix checkbox next to it.

User Settings#

Best Practices and Usage Guidelines#

• Base initial Hourly Rates on an ideal productivity scenario, considering sufficient sales volume. Avoid setting the productivity too low, as this might price your services out of the market.
• BOS Enterprise tracks the usage of Cost Centres over time, allowing organisations to validate initial assumptions and adjust productivity settings as necessary (see Recovery below).
• Periodically review and update Cost Centre calculations to reflect changes in costs and productivity.
• Compare Cost Centres' performance against industry benchmarks to identify areas for improvement.

Statuses Explained#

List View#

Buttons Explained#

Fields Explained#

Edit View#

If services make up the bulk of turnover, add overheads (such as rent, electricity and admin salaries) directly to the Hourly Rate calculation. BOS can proportionally allocate overhead amounts to production Cost Centres based on their monthly costs.

Indirect Overhead Allocation

For businesses where outsourced work/products or material costs are substantial, it is advisable to recover overheads through an additional markup on all products, not just services.

The last date and name of the user who updated the record appear in the footer.

Buttons#

Header#

Workstations#

• Workstations are used for production planning and tracking.
• An unlimited number of workstations can be added. (Click Add Workstation (button)).
• One workstation must be selected as the default.
• From the Production Board, services are assigned to the applicable Cost Centre's default workstation.
• A different workstation can be selected in the Tracker App.

Costs#

Costs can be added manually (click Add Cost (button)) or by using the Cost Wizard (click Wizard (button)).

Wizard 

• Equipment: Enter the Market Value of the equipment, a market-related Term and Interest Rate. Enter these fields even if the equipment is paid for to account for replacement costs.
• Operators:
  1. Operators: Add the wages and number of operators.
  2. Assistants: Add the wages and number of assistants.
  3. Frequency: Check Weekly, Monthly or Annually that matches the entered rate.
     • Tip: Add the annual wages inclusive of bonuses, benefits and regularly worked overtime to calculate an accurate rate.
• Maintenance: Enter the cost and select the frequency that matches the cost.
• Click Finish (button) to complete the process.

Fields #

Totals#

Recovery#

• Provides a dropdown list to show costs recovered from: Costings, Work Orders or Quotations.
• The graph and summary display the actual productivity and usage which can be used to update the costs. See example below: