Cost Centers and Internal Orders: What’s the difference?
Cost Centers and Internal Orders both allow you to report on planned spending and compare it to actual revenue and expense postings for a specific department, program or project. Reporting is available down to the general ledger level of detail.
Key differences between the two accounts are outlined below:
Cost Centers are typically used for tracking ongoing, fiscal year based activities, while Internal Orders are used for short term activity tracking or for long term non-fiscal year based activities.
It is very important that when posting transactions either a Cost Center OR Internal Order is used, but not both. The risk of posting to both is inaccurate and possible duplicate reporting.