Cost Center Design: 21 Questions to Get it Right the First Time.
Few elements are more critical to the value you’ll get from your ERP than your cost center design. As the backbone of Financial Management, cost center structure influences everything from reporting and budgeting to security and accountability.
Yet designing it well is often a challenge, especially when finance processes are high-stakes, built on legacy platforms, and heavily reliant on tribal knowledge.We can help you bridge the gap here. In order to be successful, you want to align structure with reporting needs, security, budgeting, accountability, and future scalability. We have included a set of smart, targeted questions to ask the finance team as you make those decisions.
Translating those answers into a strategy your build teams can run with? That’s where we come in. Contact us for more info.
Strategic Purpose & Structure
What is the primary purpose of our cost center structure — reporting, budgeting, approvals, accountability, or all of the above?
Do we want cost centers to mirror our org structure (e.g., departments, teams), or reflect how we manage and track costs?
Are cost centers aligned to operational units, legal entities, or other drivers?
Do we anticipate needing to track shared services or cross-functional spend?
Budgeting & Financial Management
Are budgets created and managed at the cost center level?
How often do budgets change — and how flexible does our structure need to be to support adjustments?
Do we need to support roll-up budgeting at different organizational levels?
Reporting & Analytics
What key reports or dashboards will rely on cost center data?
What level of granularity do we need for expense tracking and reporting?
How often do we need to slice data by cost center vs. other dimensions (e.g., programs, projects, locations)?
Will this structure support variance analysis, forecasting, and actuals tracking?
Governance & Access Controls
Who will be responsible for maintaining the cost center hierarchy in Workday?
How frequently do we add, deactivate, or restructure cost centers?
Do we have naming conventions, numbering logic, or categorization rules we need to follow?
Who needs visibility into which cost centers — and at what level (view, edit, approve)?
Should cost centers drive security roles or approval workflows (e.g., who approves expense reports, journals, budgets)?
Future-Readiness
Are we planning any organizational changes, acquisitions, or system integrations that could impact this structure?
Will this design scale with future growth — or do we expect to revisit it in the next 12–18 months?
Are there known pain points in our current cost center model that we want to solve with this redesign?
Integration & Intersections
How should cost centers interact with other Worktags — like programs, projects, funds, or grants?
Are there downstream systems (e.g., payroll, procurement, planning tools) that will rely on cost center data or hierarchy?
