Cost centre (business)

Cost Center and Cost Center is an inherited from the English cost center name for an independent business unit (business unit) that normally has a budget to work with to achieve its objectives. In this sense, a cost center include one or more cost centers, but is not synonymous to understand. However, a cost center is used in other contexts as literal English translation and synonym of cost center; then it is different from the meaning listed in this article.

Cost centers can be described as follows: You will be guided cost- focused and have interfaces to other center types. Its performance has to provide defined standards, eg in terms of quality of services and associated lead times. Cost Center have their own budget or cost responsibility and must therefore may affect the relevant cost drivers. Cost centers are internal service providers whose services are often not useful "sold" on the internal "market". The services they provide may be used by other centers will be obtained at the external market, so the term " internal monopoly service provider". Reasons for this may be confidentiality in research and development, for example. Cost centers are often core competency areas, which do not want to expose the pressure of external competition, the business lines. It is conceivable, for example, to run the marketing department of a company as a cost center, cost responsibility is possible to attribution of revenues, such as the Investment Centre or profit center, rather difficult.

Ultimately, targets the cost center by cost transparency ( which costs what?) On achieving maximum cost minimization.

A cost center is usually represents a major area of ​​responsibility and therefore usually involves more than one cost center.