cost centers

A cost center is a specific part of an organization, like a department or unit, where costs are tracked separately. Its purpose is to help manage and control expenses without directly generating revenue. For example, the HR orIT department can be considered cost centers because they incur costs that are monitored and analyzed. By analyzing costs within each center, a business can identify areas to improve efficiency and control spending. Essentially, cost centers help organizations understand where money is being spent and assist in budgeting and financial management.