cost center

Definition

A department that spends money but doesn't directly generate revenue, making it perpetually vulnerable during budget cuts despite often being essential. Where accountants go to find sacrificial lambs.

Example Usage

HR is considered a cost center here, which explains why we're using recruitment software from 2008.

Origin

Management accounting terminology from the mid-20th century

Fun Fact

IT departments are the most common cost centers, yet companies spend an average of 3.28% of revenue on them—essential but eternally under-appreciated.

Source: Accounting and financial management terminology

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