This glossary serves to clarify and document the meanings of terms used within the MOSA and TMMS framework.
AFE - "Approved Funded Expenditure"
Is expenditure, which has been approved for a specific project. It can be both Capital or Operational expenditure and may run across all business boundaries. An AFE is similar to an Approved Budget for a specific activity. An AFE is named in the following fashion:
- AFE No :- YYYY-000123 (Sequentially numbered within a year)
- AFE Title :- Warehouse Development Project - Phase 1
Cost Code
A method of grouping individual costs based on their nature or function. Codes usually consist of numeric characters with an account title. For example, costs related with selling and marketing are classified under Selling Expenses with a cost code of 0001. Cost coding is used to facilitate easy classification of costs.
Business Unit
A logical element or segment of a company (such as accounting, production, marketing ) representing a specific business function, and a definite place on the organizational chart, under the domain of a manager. Also called department, division, or a functional area.
Cost Centre
A cost centre is a business unit that is only responsible for the costs that it incurs. The manager of a cost centre is not responsible for revenue generation or asset usage. The performance of a cost centre is usually evaluated through the comparison of budgeted to actual costs. The costs incurred by a cost centre may be aggregated into a cost pool and allocated to other business units, if the cost centre performs services for the other business units. Examples of cost centres are as follows:
- Accounting department
- Human resources department
- IT department
- Maintenance department
- Research & development