Fiducia TogetherCost centre and profit centre
Splitting the business into parts you can measure separately.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
A cost centre incurs costs and is measured on them. A profit centre has its own revenue and costs and is measured on the result.
Why it matters
It answers the question a single profit and loss cannot: which part of the business is working.
What it looks like in practice
Set them up in the chart of accounts at the start. Retrofitting them means recoding history or losing the comparison.\n\nKeep the number small — five meaningful centres beat twenty nobody maintains.
What to watch out for
Allocating shared overheads arbitrarily and then treating the result as a verdict on a manager. Compare on contribution before allocation.
Where to get proper advice
Your accountant.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.