Cost Center vs Internal Order

You might be asking, what's the difference between a cost center and an internal order?

A cost center is use to monitor and trace who incurred a specific cost from your organization. It is use for fixed reporting for a long time period as part of your organization structure. The definition of a cost center can be based on: Functional requirements; Allocation criteria; Physical location; and Responsibility for costs.

Whereas, an internal order is a tool use to monitor costs, and in some cases, use to monitor revenues of your organization. It can be used for the following purposes: Monitor the costs of a short-term jobs; Monitor the costs and revenues of a specific service; and Ongoing cost control.

If an order is REAL order, you post costs to an internal order not to a cost center. Otherwise, if it is a STATISTICAL order, costs are posted to a cost center and to an order simultaneously.