Departments and cost centres

article ID: 2021902 

What are departments and cost centres and how do I establish them in Mamut?

Departments and cost centres
Departments are the break up of a business into functional groups within an organisation. Cost centres are used to look at and divide the fixed costs caused by different departments or sections of a business. A cost centre should group together activities or operations having similar characteristics, and broadly similar patterns of costs, to provide an entity with comparisons between departments. You should identify no more than a few important cost centres in your operation; otherwise accounting for them will become a burden.

Departments and MAMUT

A department can be set up and edited within MAMUT by

1. Selecting the Customer database under Settings.

2. Choose Properties register, select Departments then Edit.

Within this function it is possible to create, edit or delete departments. By creating different departments it will become possible to classify and analyse the cost and profit centres within several functions of the software.


Departments and projects

Once the departments of the company are established it is possible to apply projects within the organisation to these departments. This is done by

1. Selecting View on the tool bar.

2. Select Project then Project register.

3. The department the project relates to can be selected from the drop-down menu next to the department item.


Departments and Invoicing

Invoices can be linked to departments to analyse the sales of each section of the organisation and determine the profit centres within which cost centres can be applied.

It is possible to link invoices to departments by:

1. Entering the Sales and invoicing focus area.

2. Click the Miscellaneous tab.

3. Select the project by using the drop-down menu located next to the heading Project.

The project should already be linked to the department (see: departments and projects).


Departments and Contacts

Contacts can be linked to departments to separate clients into groups depending on organisational requirements.

Contacts can be linked to departments by:

1. Selecting the Client focus area.

2. Open the tab labelled Other Info.

3. Use the drop-down menu located next to Department as required.


Departments and Employees

Employees can be segregated into departments to help facilitate the establishment and monitoring of cost centres.

Employees can be linked to a department by:

1. Select the Employee register focus area under Human resources.

2. Enter all employee details.

3. Under the department heading, use the drop-down menu to select the appropriate department.


Departments and journal entries

The first step is to establish the department function within the journal entries. This is done by:

1. Enter the Settings focus area.

2. Under the User profile select the tab Setting per module and click the Journal entry icon.

3. Tick the box located under the 'Show' column which corresponds with 'Department'.

To enter departmentalised journals:

1. Go through the normal journal entry process.

2. The journal template will now include the column 'Department'. Use the drop-down menu to select the department the entry is related to.

3. The journal list and nominal ledger will not display departmentalised entries. To view departmentalised results it is necessary to use the report function.


Departments and Reports

The report function can facilitate the viewing of departmentalised figures to help determine and compare cost and profit centres within an organisation. The majority of the departmental reports are found within the Accounting section. It is possible to view departmental accounting reports by:

1. Selecting the Reports focus area.

2. Select the Accounting tab and click the desired report.

3. Determine the required viewing medium and select Print.

A filter will appear, either as a query or a 'pop-up'.

For query form:

1. Select the Default tab.

2. Use the drop-down menu to select the reporting department.

For pop-up form:

1. Ensure all period details are correct.

2. Use the drop-down menu to select the reporting department.


Departments and foreign currency

Within Mamut, it is possible to establish departmental accounts in various currencies. If transactions are being made outside of the UK it may be beneficial for management and accounting purposes to report in the currency of the department's operating country. For comparison and accounting purposes they can also be displayed in GB pounds or a variety of other currencies.

To set up departmental journals for foreign currencies:

1. Enter User settings - User profile via the focus area.

2. Select the Setting per module tab and click the Journal entry icon.

3. Tick the box next to currency and click OK.

There will now be a currency and exchange rate column in the journal entry field located next to the department column.

To enter departmental journals in foreign currencies:

1. Go through the normal journal entry procedures by selecting one of the transaction journal icons, or manually entering a journal.

2. Select the appropriate department and the appropriate currency.

There will be a default exchange rate to correspond with the selected currency. This can be changed to reflect the rate at the date of transaction. The debit and credit fields will default to GB pounds. When an entry (in pounds) is made, the value of the entry will be displayed in the selected foreign currency in the column marked 'Cur. Total'.

Note: The software will assume that all entries made in the debit/credit fields are in the default currency (GB pounds).



Departmental reporting in foreign currency

Mamut software allows the user to view departmental reports in a variety of foreign currencies regardless of the currency of the journal entries. This function can can be useful for management and accounting processes.

To create departmental reports in foreign currencies:

1. Enter the Reports focus area and select the Accounting tab.

2. Select the required report.

3. Select the appropriate print medium and in the right-hand column and select Print.

4. A new screen will pop up allowing you to select the appropriate department and currency.

5. Select the required details for the report and click Print.


Query words: departments, cost centres