What does the term 'cost centre' not include?

The term 'cost centre' refers to a department or function within an organization that does not directly generate revenue but is accountable for its costs and expenditures. Cost centres focus primarily on expense monitoring, budget accountability, and expense allocation, as they aim to manage and control costs effectively within a specific area of the business.

Revenue generation tracking falls outside the scope of a cost centre's purpose. Cost centres are not involved in generating income; instead, their goal is to optimize costs and maintain budgets. By focusing on expenses rather than revenue, cost centres allow organizations to analyze and improve operational efficiency without the direct pressure of revenue targets. In contrast, revenue-generating departments would be categorized as profit centres, which directly contribute to the organization's income.