---
title: Budgets and cost centers
description: Understand what budgets and cost centers are and how to manage them in the Cost Management application.
locale: en-US
canonical_url: https://www.servicenow.com/docs/r/australia/it-business-management/cost-management/c\_BudgetsAndCostCenters.html
release: australia
product: Cost Management
classification: cost-management
topic_type: concept
last_updated: "2026-03-12"
reading_time_minutes: 1
breadcrumb: [Cost Management, Strategic Portfolio Management]
---

# Budgets and cost centers

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://raw.githubusercontent.com/ServiceNow/ServiceNowDocs/australia/markdown/australia/it-business-management/cost-management/c_BudgetsAndCostCentersExample.md)**  
The most common business entity to associate financial information is the cost center.
-   **[Create or update cost centers](https://raw.githubusercontent.com/ServiceNow/ServiceNowDocs/australia/markdown/australia/it-business-management/cost-management/c_ManageCostCenters.md)**  
Define a new cost center or update the details of the existing cost centers.
-   **[Create or update a budget](https://raw.githubusercontent.com/ServiceNow/ServiceNowDocs/australia/markdown/australia/it-business-management/cost-management/t_ManageABudget.md)**  
Cost management provides budgets for you to plan expenses for a certain time period.
-   **[Cost centers related records](https://raw.githubusercontent.com/ServiceNow/ServiceNowDocs/australia/markdown/australia/it-business-management/cost-management/c_CostCentersRelatedRecords.md)**  
Cost centers are related to additional records, displayed as related lists on its form.
-   **[Associate cost centers to a budget](https://raw.githubusercontent.com/ServiceNow/ServiceNowDocs/australia/markdown/australia/it-business-management/cost-management/t_ManageABudgetsCostCenters.md)**  
You create cost centers and associate budgets and expense allocations with them.

**Parent Topic:**[Cost Management](https://raw.githubusercontent.com/ServiceNow/ServiceNowDocs/australia/markdown/australia/it-business-management/cost-management/r_CostManagement.md)