A cost object is a dimension integrated into the General Ledger (GL) account for work in progress, which can be configurable. This dimension is utilized to segregate the balance of work in progress according to various criteria.
To enable this feature, go to Settings > Production Settings > Advanced Product Costing. Here, you can specify the criteria for accumulating work in progress. Accumulation can be based on different factors, such as customer orders (where costs are recognized under a specific Cost Object), item/service level, project, or project task.
Work in progress can be tracked and accumulated by cost objects, which can also be distinguished by different projects.
A cost object functions as master data within the accounting system. It is not populated in the subsystem but is accessible across all relevant transactions.
The catalog reference for the cost object is incorporated into the Chart of Accounts under the Work in Progress category within the inventory group.
By integrating the cost object, its impact will be reflected in the General Ledger and detailed in the trial balance report.
Working with Cost Objects as a Dimension:
Create an Invoice:
- Record the expense and ensure that the General Ledger (GL) account associated with this item is designated as a Work in Progress.
Cost Object Field:
- The Cost Object field will be available. Selecting it will open a new master data list for cost objects, displaying all relevant details at various levels.