What is the relationship between Funds Centers and Cost Centers?
Both Funds Centers (FC) and Cost Centers (CC) are organized in a hierarchical structure. However, they are two separate and distinct hierarchies. When creating a new Funds Center you will identify the “parent Funds Center”, while with Cost Centers you will identify the “CC Group”. Multiple CC Groups will be set up under CC Nodes as part of the hierarchy structure. It is important to structure your hierarchy based on your units’ budgeting and reporting needs.
Below is an example of how FC and CC hierarchies may be set up to meet budgeting and reporting needs. The full hierarchies are shown however the example focuses on the ‘U of T Magazine’:
The following chart provides an example of how a Funds Center is used for budgeting purposes, while the Cost Center Group includes four Cost Centers related to various costs associated with the magazine. In the scenario below, a total budget of $100,000 has been established in the FC for the current fiscal year. The costs are allocated and planned in the four issues equally using different Cost Centers. This example illustrates that a budget can be located in one FC with funds availability checking, while actual revenues and expenses can be tracked using multiple CCs for reporting.