Understanding Cost Centers and Cost Codes
In ToolWatch, Cost Centers and Cost Codes work together to track how and where charges are applied across your projects, locations, or teams. This structure gives you more accurate and detailed job costing and billing reports.
What Is a Cost Center?
A Cost Center identifies where to direct the charge.
It can represent a project, location, or department.
Charges are based on the rates and rules defined in your setup.
A single Cost Center can be linked to multiple projects or locations—there’s no limit.
What Is a Cost Code?
A Cost Code is a breakdown of the charge that explains what the charge is for.
It shows how equipment or materials were used.
Cost Codes live under Cost Centers and help categorize charges for more detailed reporting.
How Cost Centers and Cost Codes Work Together
Think of it like this:
Cost Centers = Where
Cost Codes = What
Example:
If you're working on the Stoneybrook site (Cost Center) and you use a Drill for General Conditions, that activity is charged to Stoneybrook > General Conditions.
This helps you:
Report on total charges per job or location.
See how charges are distributed within each project.
Important Notes on Assigning Charges
When creating tool and material transactions (like transfers or work orders):
You don’t assign items directly to Cost Centers.
Instead, you assign them to locations (projects, warehouses) or employees.
This is done because the transaction or transfer must include information that designates which Cost Center is to be charged—along with where the item is going, who it’s for, and other related details.
This means a single Cost Center can consolidate charges from many smaller job areas or teams.