--- id: topic/business-central/business-functionality/finance/accounting-for-costs type: topic title: Accounting for costs summary: "Cost accounting in Business Central: terminology, setup of cost types, cost centers and cost objects, transferring ledger entries, allocating costs, cost budgets, and built-in reports. It answers how-to and concept questions about analyzing costs by type, location, and bearer." tier: official language: en system: finance review: state: reviewed by: opus at: "2026-10-07T02:20:27.418Z" flags: [] generated: at: "2026-10-08T06:31:25.130Z" pipeline: 0.2.0 prompts: hub-topic: 1 input_hash: fde34798879f0f5f594d0791ed8e6604504b4c90a91a05db665c5745533ea653 evidence: - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-about-cost-accounting title: About cost accounting date: "2024-07-25" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-manage-cost-accounting title: Accounting for costs overview date: "2024-07-25" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-cost-accounting-reports title: Built-in cost accounting reports in Business Central date: "2025-06-23" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-create-cost-budgets title: Creating cost budgets date: "2024-07-26" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-define-and-allocate-costs title: Defining and allocating costs date: "2024-07-26" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-how-to-delete-cost-budget-entries title: Delete cost budget entries date: "2024-07-26" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-set-up-cost-accounting title: Set up cost accounting date: "2024-07-25" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-terminology-in-cost-accounting title: Terminology in cost accounting date: "2024-07-25" commit: null t: null quote: null - kind: learn url: https://learn.microsoft.com/dynamics365/business-central/finance-transfer-and-post-cost-entries title: Transferring and posting cost entries date: "2024-07-26" commit: null t: null quote: null links: learn: - https://learn.microsoft.com/dynamics365/business-central/finance-about-cost-accounting - https://learn.microsoft.com/dynamics365/business-central/finance-manage-cost-accounting - https://learn.microsoft.com/dynamics365/business-central/finance-cost-accounting-reports - https://learn.microsoft.com/dynamics365/business-central/finance-create-cost-budgets - https://learn.microsoft.com/dynamics365/business-central/finance-define-and-allocate-costs - https://learn.microsoft.com/dynamics365/business-central/finance-how-to-delete-cost-budget-entries - https://learn.microsoft.com/dynamics365/business-central/finance-set-up-cost-accounting - https://learn.microsoft.com/dynamics365/business-central/finance-terminology-in-cost-accounting - https://learn.microsoft.com/dynamics365/business-central/finance-transfer-and-post-cost-entries objects: - object/page/1100 - object/page/1101 - object/page/1102 - object/page/1103 - object/page/1104 - object/page/1105 - object/page/1106 - object/page/1107 - object/page/1108 - object/page/1109 - object/page/1111 - object/page/1112 - object/page/1113 - object/page/1114 - object/page/1115 - object/page/1116 - object/page/1117 - object/page/1118 - object/page/1119 - object/page/1120 - object/page/1121 - object/page/1122 - object/page/1123 - object/page/1124 - object/page/1131 - object/page/1132 - object/page/1133 - object/page/1135 - object/report/1123 - object/report/1125 - object/report/1126 - object/report/1127 - object/report/1128 - object/report/1129 - object/report/1133 - object/report/1138 - object/report/1700 - object/report/1701 - object/report/1702 - object/report/4405 features: [] topics: - topic/business-central/business-functionality/finance localizations: [] videos: [] posts: [] guidelines: [] changes: - change/bcapps/11153 - change/bcapps/11710 - change/bcapps/11907 - change/bcapps/9545 - change/bcapps/9943 learn_toc_path: - Business functionality - Finance - Accounting for costs toc_file: business-central/TOC.md parent: topic/business-central/business-functionality/finance children: [] coverage: learn: 9 code: 40 video: 0 blog: 0 guideline: 0 bc_forms: - 1100 - 1101 - 1102 - 1103 - 1104 - 1105 - 1106 - 1107 - 1108 - 1109 - 1111 - 1112 - 1113 - 1114 - 1115 - 1116 - 1117 - 1118 - 1119 - 1120 - 1121 - 1122 - 1123 - 1124 - 1125 - 1126 - 1127 - 1128 - 1129 - 1131 - 1132 - 1133 - 1135 - 1138 - 1700 - 1701 - 1702 - 4405 - 10007 - 10008 member_hash: 253009b5170bcbde2efda8d28b609be2a69b1bc2cf29742ab0d494b533034c10 narrative: generated --- # Accounting for costs > Cost accounting in Business Central: terminology, setup of cost types, cost centers and cost objects, transferring ledger entries, allocating costs, cost budgets, and built-in reports. It answers how-to and concept questions about analyzing costs by type, location, and bearer. Path: [Business functionality](../../business-functionality.md) > [Finance](../finance.md) > Accounting for costs · tier official · system finance · narrative reviewed (checked by Opus) ## Overview Cost accounting analyzes business costs by type, location, and bearer to determine profitability. It works through cost types, cost centers, and cost objects, with allocations, budgets, and reports built on top of them. The pages follow the working order. Start with the overview, "About cost accounting" and the terminology page for concepts. Then use "Set up cost accounting" to define cost types, centers, and objects and link them to general ledger accounts. Next come transferring and posting cost entries, defining and allocating costs, and creating cost budgets. Reports and budget entry cleanup are covered last. ## Key points - Setup defines cost types, cost centers, and cost objects and links them to general ledger accounts; cost center and cost object dimensions and automatic cost adjustment are part of it. - General ledger entries are transferred to cost accounting automatically by set criteria or posted manually; combined entries and tracing between cost and ledger entries are supported. - Cost allocations move costs and revenues between cost types, centers, and objects using allocation sources and targets. - Allocation bases can be static or dynamic, for example employee counts or sales figures. - Cost budgets are based on cost types for a fiscal period; batch jobs copy, allocate, and report budgets, with comparison to actual costs. - A batch job deletes cost budget entries from the cost budget register while preventing gaps in the register sequence. - Report Explorer gives access to the built-in cost accounting reports. ## Learn pages - [About cost accounting](https://learn.microsoft.com/dynamics365/business-central/finance-about-cost-accounting): Cost accounting can help you understand the costs of running a business. Cost accounting information is designed to analyze various issues. - [Accounting for costs overview](https://learn.microsoft.com/dynamics365/business-central/finance-manage-cost-accounting): Cost accounting helps you understand the costs of running a business. This article provides links to other articles with more information. - [Built-in cost accounting reports in Business Central](https://learn.microsoft.com/dynamics365/business-central/finance-cost-accounting-reports): Explore the built-in cost accounting reports in the standard version of Business Central. - [Creating cost budgets](https://learn.microsoft.com/dynamics365/business-central/finance-create-cost-budgets): This article provides an overview of where to create and analyze cost budgets. Budgeting in cost accounting resembles budgeting in the general ledger. - [Defining and allocating costs](https://learn.microsoft.com/dynamics365/business-central/finance-define-and-allocate-costs): Cost allocations move costs and revenues between cost types, cost centers, and cost objects. You can define as many allocations as you need. - [Delete cost budget entries](https://learn.microsoft.com/dynamics365/business-central/finance-how-to-delete-cost-budget-entries): You use the Delete Cost Budget Entries batch job to cancel cost budget entries from the cost budget register. - [Set up cost accounting](https://learn.microsoft.com/dynamics365/business-central/finance-set-up-cost-accounting): Before you start working with cost accounting, you must setup. Each cost entry must have a cost type assigned and a cost center code or a cost object assigned. - [Terminology in cost accounting](https://learn.microsoft.com/dynamics365/business-central/finance-terminology-in-cost-accounting): This article defines the key terms that are used in cost accounting, such as allocation key and allocation source. - [Transferring and posting cost entries](https://learn.microsoft.com/dynamics365/business-central/finance-transfer-and-post-cost-entries): Before you define cost allocations, you must understand the various sources that cost entries come from. ## Videos, posts and code changes Linked by a Haiku matcher with a grounding quote from the item's summary (link/topics.ts); machine-generated. - [#11153 Bug 649312: [29.x] Backport expense request report layout and dataclassification on userid field](../../../../changes/bcapps/11153.md) (code change): "Spend Request Document report and its Word layout updated as a backport" - [#11710 [29.x]-Not enough inventory available at vendor location for this order](../../../../changes/bcapps/11710.md) (code change): "Component consumption was being posted twice during subcontracting receipt" - [#11907 [29.x]-Incident 51000001968459: Issue while creating any import purchase invoice](../../../../changes/bcapps/11907.md) (code change): "Custom Duty now correctly included in Inventory and Direct Cost Applied entries" - [#9545 636017 Move Cost Accounting report action tooltips to report objects](../../../../changes/bcapps/9545.md) (code change): "Report action tooltips for Cost Accounting reports are moved from page actions to report objects" - [#9943 [Master]-Purchase invoice in USD with deferral shows 0 "Amount LCY" in Deferral Schedule View"](../../../../changes/bcapps/9943.md) (code change): "Purchase invoices in a foreign currency with deferrals" ## Business Central pages and reports The pages, reports and queries this hub's Learn pages name (ms.search.form, API reference), joined to the code by exact object id (data/index/docs-objects.json); a page shows the table it runs on. - [Page 1100 "Chart of Cost Types"](../../../../objects/page/1100.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1101 "Cost Type Card"](../../../../objects/page/1101.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1102 "Cost Allocation Sources"](../../../../objects/page/1102.md) · captioned "Cost Allocations" · on [Table 1106 "Cost Allocation Source"](../../../../objects/table/1106.md) - [Page 1103 "Cost Entries"](../../../../objects/page/1103.md) · on [Table 1104 "Cost Entry"](../../../../objects/table/1104.md) - [Page 1104 "Cost Registers"](../../../../objects/page/1104.md) · on [Table 1105 "Cost Register"](../../../../objects/table/1105.md) - [Page 1105 "Cost Allocation"](../../../../objects/page/1105.md) · on [Table 1106 "Cost Allocation Source"](../../../../objects/table/1106.md) - [Page 1106 "Cost Allocation Target"](../../../../objects/page/1106.md) · captioned "Lines" · on [Table 1107 "Cost Allocation Target"](../../../../objects/table/1107.md) - [Page 1107 "Cost Journal Templates"](../../../../objects/page/1107.md) · on [Table 1100 "Cost Journal Template"](../../../../objects/table/1100.md) - [Page 1108 "Cost Journal"](../../../../objects/page/1108.md) · captioned "Cost Journals" · on [Table 1101 "Cost Journal Line"](../../../../objects/table/1101.md) - [Page 1109 "Cost Allocation Target Card"](../../../../objects/page/1109.md) · on [Table 1107 "Cost Allocation Target"](../../../../objects/table/1107.md) - [Page 1111 "Cost Center Card"](../../../../objects/page/1111.md) · on [Table 1112 "Cost Center"](../../../../objects/table/1112.md) - [Page 1112 "Cost Object Card"](../../../../objects/page/1112.md) · on [Table 1113 "Cost Object"](../../../../objects/table/1113.md) - [Page 1113 "Cost Accounting Setup"](../../../../objects/page/1113.md) · on [Table 1108 "Cost Accounting Setup"](../../../../objects/table/1108.md) - [Page 1114 "Cost Allocation Target List"](../../../../objects/page/1114.md) · on [Table 1107 "Cost Allocation Target"](../../../../objects/table/1107.md) - [Page 1115 "Cost Budget Entries"](../../../../objects/page/1115.md) · on [Table 1109 "Cost Budget Entry"](../../../../objects/table/1109.md) - [Page 1116 "Cost Budget Names"](../../../../objects/page/1116.md) · captioned "Cost Budgets" · on [Table 1110 "Cost Budget Name"](../../../../objects/table/1110.md) - [Page 1117 "Cost Budget per Period"](../../../../objects/page/1117.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1118 "Cost Budget by Cost Center"](../../../../objects/page/1118.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1119 "Cost Budget by Cost Object"](../../../../objects/page/1119.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1120 "Cost Type Balance/Budget"](../../../../objects/page/1120.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1121 "Cost Budget Registers"](../../../../objects/page/1121.md) · on [Table 1111 "Cost Budget Register"](../../../../objects/table/1111.md) - [Page 1122 "Chart of Cost Centers"](../../../../objects/page/1122.md) · on [Table 1112 "Cost Center"](../../../../objects/table/1112.md) - [Page 1123 "Chart of Cost Objects"](../../../../objects/page/1123.md) · on [Table 1113 "Cost Object"](../../../../objects/table/1113.md) - [Page 1124 "Cost Type List"](../../../../objects/page/1124.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1131 "Cost Budget per Period Matrix"](../../../../objects/page/1131.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1132 "Cost Bdgt. per Center Matrix"](../../../../objects/page/1132.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1133 "Cost Bdgt. per Object Matrix"](../../../../objects/page/1133.md) · on [Table 1103 "Cost Type"](../../../../objects/table/1103.md) - [Page 1135 "Cost Journal Batches"](../../../../objects/page/1135.md) · on [Table 1102 "Cost Journal Batch"](../../../../objects/table/1102.md) - [Report 1123 "Cost Acctg. Stmt. per Period"](../../../../objects/report/1123.md) - [Report 1125 "Cost Types Details"](../../../../objects/report/1125.md) - [Report 1126 "Cost Acctg. Statement"](../../../../objects/report/1126.md) - [Report 1127 "Cost Acctg. Analysis"](../../../../objects/report/1127.md) - [Report 1128 "Cost Acctg. Journal"](../../../../objects/report/1128.md) - [Report 1129 "Cost Allocations"](../../../../objects/report/1129.md) - [Report 1133 "Cost Acctg. Statement/Budget"](../../../../objects/report/1133.md) - [Report 1138 "Cost Acctg. Balance/Budget"](../../../../objects/report/1138.md) - [Report 1700 "Deferral Summary - G/L"](../../../../objects/report/1700.md) - [Report 1701 "Deferral Summary - Sales"](../../../../objects/report/1701.md) - [Report 1702 "Deferral Summary - Purchasing"](../../../../objects/report/1702.md) - [Report 4405 "EXR Trial Balance Excel"](../../../../objects/report/4405.md) · captioned "Trial Balance (Excel)" Learn also names 2 objects with no object page: report/10007, report/10008. Source: Microsoft Learn (CC BY 4.0). Descriptions are Learn's own.