About Responsibility Centers

General Ledger Responsibility Centers Parameters

Responsibility Centers (RC) let you view or report information about a particular segment of the business, even if its activity occurs over multiple locations. As long as there have been organized companies, internal reports have been segmented to better understand the performance of sales districts, product lines, distribution centers, and general and administrative cost centers. The term, responsibility center, refers to a manager or managers who are evaluated on the performance of revenue, profitability, or cost control. For example, Joe, in the Virginia office, is responsible for buying paper for all branches. Joe has a responsibility center assigned to him specifically for paper.

Note: This feature is not included in all software packages and may require authorization. For more information, contact ECi sales.

Responsibility centers let you further break down your information. For example, if your revenue or cost center information is currently broken down by location, you can further break it down by responsibility centers within that location. The RC can be controlled by item departments or salesperson.

RCs are now part of your general ledger accounts. In the Chart of Accounts Master window, you can set up fifteen-digit accounts numbers. The first two digits are location; the next four digits identify the cost or responsibility center; the next six digits specify the major account number; and the final three digits specify the minor account number. For more information, see Using Fifteen Digit Account Numbers.

Note: When converting from seven-digit G/L numbers to fifteen-digit G/L numbers and using responsibility centers, all RC accounts convert to account number 0000. You should probably change this number for reporting purposes.

Responsibility centers affect many different areas of the system. You can assign RCs in the following databases: Salespersons, Vendors, Item, and General Ledger.

Responsibility centers also affect the Order Entry application. For more information, see Understanding Responsibility Centers and Salespersons in Order Entry.

Responsibility centers also affect the Machines application. For more information, see Understanding Serialized Responsibility Centers.

There are several important issues to consider before setting up the responsibility centers.

0000 is the default RC summary level center. (We recommend you create a unique RC summary account number for reporting purposes.)
You must set up a default corporate center. The default center contains the balance sheet accounts for the location. The default is typically the general and administrative center.
You must also create a set of accounts for each RC in the Chart of Accounts. Once the accounts for a revenue or expense center have been created, you can use the Copy Records action in the Chart of Accounts Special dialog box to reduce keystrokes as new centers are added.

You should also plan for the future. For example, you might set up the following accounts:

Center 1200 is set up as the Ohio sales territory – Regional VP XXXX
Center 1210 is set up as the Cleveland district – District Mgr YYYY
Center 1240 is set up as the Cincinnati district – District Mgr ZZZZ

Using these examples allows reports to be easily generated for VP XXXX by including the RC range of 1200 – 1240.

If Regional VP XXXX manages sales in Ohio for two separate companies (like one furniture division and one office supply division), center 1200 would be set up in both companies as the Ohio sales territory. This lets you easily generate reports across locations by limiting the responsibility centers.

A range of open numbers should be left between centers to allow for future growth and changes. For example, Cincinnati may be broken down into two districts or a new district may be added for a new major city. Additionally, districts may be broken down even further into routes. You might leave 20 or more open numbers between the districts. Another advantage of leaving a range of open numbers is that you can later break down the RC information even further.

Before you set up RCs, you must first take into account how you run your business. For example, in addition to creating RCs, you need to set up business types in the General Ledger Departments Parameters. Examples of these types are machines parts or machine services, or service contracts, etc. When an item is placed on an order, the GL Dept box in the Item Master tab checks the Dept box in the G/L Department parameters. If these match, the system uses this to set the responsibility center. The system checks the Type Limits boxes in the Responsibility Center parameters. Therefore, you must first set up parameters before creating and assigning responsibility centers. See Setting Up Responsibility Centers.

In Report Writer, you can limit reports by Responsibility Center (RC).

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