Finance Fundamentals
Cost Centres?
Definition and purpose of a cost centre
A cost centre is used to define a pool of funds for a specific purpose. A cost centre is connected to a specific organisational unit within the university. Different features are connected to a cost centre that is important for financial reporting.
Commitments?
?Cancellation of Liabilities
?What is a liability?
In order to ensure financial sustainability and prevent overspending, the SU financial operating system tests for funds. When a requisition is created and approved and funds are available, the funds are liable against the cost centre or kept in the cost centre and will only be made available during payment.
Reasons for cancellation of liabilities
- When payment does not occur for whatever reason, the liability on the financial system also has to be cancelled in order to make the funds available again within the balance on the cost centre.
- In the case of corrections: If the order has already been created on the system (requisition status 5), no amendments can be made to the order. If the item lines or amounts should be amended, the order has to be cancelled and be redone.
- Cancellations of balance values: If only part of the order has been paid and the remaining part has not been cleared because of faulty goods received, the balance value has to be cancelled against the order so that the remaining funds can be made available within the cost centre balance.?
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