Cost Centres

Cost centres are financial categorization units that control where project costs are allocated in your organization's books. They bridge the gap between workforce planning and financial reporting by mapping engineering spend to the same categories your finance team uses.

Examples of cost centres include "R&D", "G&A" (General & Administrative), "Sales Engineering", or product-line-specific centres like "Platform Infrastructure" and "Mobile Products". Each cost centre can be classified as CapEx or OpEx, enabling the capital expenditure tracking that publicly traded companies and audit teams require.

Why Cost Centres Matter

Engineering is often one of the largest line items in a company's budget. Finance teams need to know not just how much is being spent, but where that spend is categorized: Is it capitalized development (CapEx) or operational maintenance (OpEx)? Which department or product line absorbs the cost?

Cost centres answer these questions automatically. When projects are linked to cost centres, every salary dollar, contractor invoice, and vacancy projection flows through to the correct financial category without manual reclassification.

Configuring Cost Centres

1. Navigate to Settings > Cost Centres
2. Click Add Cost Centre to create a new category
3. Fill in the required fields (see data model below)
4. Click Save

You can edit, reorder, or deactivate cost centres at any time. Deactivated cost centres remain visible in historical reports but cannot be assigned to new projects.

Data Model

Field	Type	Required	Description
name	string	Yes	Display name for the cost centre (e.g., "R&D")
code	string	No	Short code for financial reporting (e.g., "CC-100")
description	string	No	Longer description of what this cost centre covers
costCategory	string	No	Financial classification label (e.g., "CapEx", "OpEx", "engineering", "sales")
color	string	No	Hex color code for UI display (default: "#6B7280")
isActive	boolean	No	Whether the cost centre can be assigned to new projects (default: true)
sortOrder	integer	No	Controls display ordering in dropdowns and reports (default: 0)

CapEx vs OpEx Classification

The costCategory field enables you to classify each cost centre for capital expenditure tracking.

• CapEx (Capital Expenditure): Costs that create future value and are capitalized on the balance sheet. In software, this typically means new feature development, major platform builds, and new product creation.
• OpEx (Operational Expenditure): Costs for running and maintaining existing systems. Bug fixes, infrastructure maintenance, support engineering, and operational tooling.

TIP

Work with your finance and accounting teams to define the correct costCategory values. The classification rules vary by accounting standard (GAAP, IFRS) and by company policy. Flowstate stores whatever string you provide, so you can use the categories that match your chart of accounts.

Splitting Projects Across Cost Centres

A single project can be split across multiple cost centres using project-cost-centre bindings. This is common when a project involves both capitalizable development and operational maintenance.

Example: A project to rebuild the payment processing system might be split:

Cost Centre	Allocation	Category
R&D - Platform	70%	CapEx
Operations - Payments	30%	OpEx

In this case, 70% of the project's workforce costs flow to the CapEx cost centre, and 30% flow to the OpEx cost centre. This split is configured at the project level and applies to all resource costs assigned to that project.

WARNING

Cost centre splits must total 100% for each project. Flowstate validates this when you save the project configuration. If the splits do not add up, the save will be rejected.

Impact on Reporting

Cost centre assignments flow through every level of Flowstate's financial reporting:

• Forecast views show projected costs grouped by cost centre
• Budget comparisons track actual vs planned spend per cost centre
• CapEx/OpEx reports aggregate all capitalized and operational costs across the portfolio
• Scenario analysis shows how proposed changes (new hires, project additions) affect cost centre allocations

When you change a project's cost centre assignment, all future cost projections for that project update immediately across all active forecasts and scenarios.

Best Practices

1. Align with your chart of accounts. Your cost centres should map directly to the financial categories your accounting team uses. This eliminates manual reconciliation between Flowstate and your ERP or accounting system.
2. Use the code field. Short codes like "CC-100" or "ENGR-RD" make it easy to cross-reference cost centres with external financial systems.
3. Assign colors for visual clarity. The color field is used in charts and reports. Choose distinct colors so that cost centre breakdowns are easy to read at a glance.
4. Be specific with costCategory. Rather than just "CapEx" and "OpEx", consider more granular categories if your finance team requires them (e.g., "CapEx-Internal", "CapEx-External", "OpEx-Maintenance", "OpEx-Support").
5. Deactivate rather than delete. If a cost centre is retired, set isActive to false. This preserves all historical financial data while preventing new assignments.

Required Permissions

Managing cost centres requires the settings_financial_config_* permission group. This is a separate permission from entity configuration because cost centre changes directly affect financial reporting.

Related Pages

• Cost Centres API Reference -- REST API endpoints for programmatic management
• Getting Started: Cost Attribution -- How costs flow through cost centres into financial reports
• Configuration Overview -- All configuration entities
• Value Streams -- Strategic categorization that complements financial categorization
• Exchange Rates -- Multi-currency conversion that interacts with cost centre reporting
• Work Types -- Overhead percentages that determine the costs flowing into cost centres