---
sourceDocument: Yokohama Strategic Portfolio Management
sourceDocumentLink: https://www.servicenow.com/docs/r/yokohama/it-business-management

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    - yokohama

ft:locale :

    - en-US

ft:publication_title :

    - Yokohama Strategic Portfolio Management

ft:clusterId :

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workflow :

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---

# Budgets and cost centers

# Budgets and cost centers {#ariaid-title1}

* Release version: Yokohama
* 
* Updated January 30, 2025
* 
* ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 1 minute to read

Understand what budgets and cost centers are and how to manage them in the Cost Management application.  

Budgets

:   Budgets allow tracking of planned and actual spending. Budgets are defined for a given time
    period for one or more cost centers.

Cost centers

:   Cost Centers are used to represent a business entity. All expense allocations assigned to
    the budget's cost center during the budget period are used to calculate the budget's actual
    expense allocations.

    It is also possible to assign a cost center to a budget from the cost center record. The
    cost center record contains a budgets related list.
* **[Budgets and cost centers example](https://www.servicenow.com/docs/Hc0v9ZA4ERGTkxyXox~Q3g)**   
  The most common business entity to associate financial information is the cost center.
* **[Create or update cost centers](https://www.servicenow.com/docs/3RkWKVCvX_yTAZn1Przxyg)**   
  Define a new cost center or update the details of the existing cost centers.
* **[Create or update a budget](https://www.servicenow.com/docs/ho45rCXCrVYd2Z7VonDobw)**   
  Cost management provides budgets for you to plan expenses for a certain time period.
* **[Cost centers related records](https://www.servicenow.com/docs/SC5XVGXUVOjTKBhAq0CRPg)**   
  Cost centers are related to additional records, displayed as related lists on its form.
* **[Associate cost centers to a budget](https://www.servicenow.com/docs/JNgMQECxylJnOb~GeQT~cQ)**   
  You create cost centers and associate budgets and expense allocations with them.