Accounting
What is Cost Center?
A cost center is an organizational unit — a department, team, or function — that incurs costs but does not directly generate revenue. Cost centers are tracked for budget management and cost allocation purposes.
Explanation
Cost center coding is a common manual step in invoice and expense processing. Every transaction must be coded not just to a GL account but to the correct cost center, enabling management reporting by department. When transactions are processed manually, cost center coding depends on the processor knowing which department a transaction belongs to — which requires knowledge that not all AP staff have. Automated cost center coding uses historical patterns, vendor data, and document content to assign the correct cost center, reducing miscoding and the reclassification work that follows at month-end.
How Rima relates
Rima Blueprints can include cost center coding rules — automatically assigning transactions to the correct department based on vendor, description, or other document fields.
Learn about accounting automationRelated Terms
General Ledger (GL)
The master record of all financial transactions in a business, organized by account.
Chart of Accounts
A structured list of all financial accounts used in a company's general ledger.
Financial Reporting
The process of producing financial statements that communicate a company's financial performance.
See it in action
Rima automates the manual document workflows accounting teams spend hours on every week.