FI Cost Accounting

Process Input

• Cost of Goods sold (COGS)
• Provider costs
  
• Project expenses
• Distributed "Overhead Costs"
  

Process Output

• Project ROI
  
• Project Net Present Value
• Gross profit earned on individual projects
  

Terminology

• Cost Object
  A cost object is any segment or an element for which the cost information is desired. Typically there are three types of cost objects:
  
  • Output -> A service provided / a project executed / a product created
    
  • Operational -> A company, department, process
  • Business Relationship -> Costs for a supplier or a customer
• Costs of Goods sold (COGS)
  Costs of goods sold in the service industry are principally payroll expenses
  
• Project ROI
• Net Present Value
• Cost of Sales
• Overhead costs
  Costs that occur to maintain business operations, commonly distributed across cost units  
  
• Direct/indirect costs
  

Objectives:

• Support Cost-plus pricing method
• Profitability studies 
• Control of spending
• Cash flow planning See RFE for Cash Flow Planning
  

Key­ Dimensions Timesheet Costs covered by ]po[

Time spent on a particular Customer  (global effort)

•  Report Timesheet Customer/Project

Time spent on internal activities

• In its basic form, projects can be distinguished between
  
• internal projects (Customer is the 'Internal company') or
  
• external projects (Customer is a Company of type 'Client')
  
  
• Some projects might be executed internally, whereby a customer is a internal department and the project is executed by a second internal department.

• In all cases existing reports can be adjusted/extended easily to distinguish btw. internal/external effort.
  

Time spent on a particular Project

• Report Timesheet Customer/Project
• Other portlets / minor report functionality
  

Time spent on a particular Product

• Case 1: Each project or each group of projects (Program) is assigned to exactly one product
  Create Dynamic Field for object type "Project" and adjust / extend reports accordingly
  
  
• Case 2:  Within one project several products will be delivered
  
• Case 2a: Assignation product / sub-project is possible
  -> see Case 1
  
• Case 2b: Assignation to product / sub-project not possible
  -> Add Dynfields to Material and assign to each task the according material 
  

Time spent on a particular task outside of a formal project

• Option 1: Create a project for each Development Task / consider creating a container project

• Option 2: Use the Helpdesk Module
  

Time spent by a group of employees (team) on a particular product or customer.

• Case 1: Group of employees is a department
  Create departments in Cost Center Module and set relationship employee/department in HR Module - Portlet "Employee Information"
  
  
• Case 2: Create a new ]po[ Group and adjust reports accordingly
  
  

Setting up Cost Accounting in ]po[

• Step 1: Define relevant "Cost Objects" 
• Step 2: Define frequency of measuring the costs 
• Step 3: Define data input 
• Step 4: Perform GAP Analysis to evaluate input data not yet managed with ]po[ 
• Step 5: Create Forms, Portlets and Reports 
• Step 6: Adjust Business processes / inform employees
  

Example:

Determine HR Profitability in projects:

Step 1 - Define relevant "Cost Objects":

• Customer / Project Type 
  
• Project
  

 Step 2 - Define frequency of measuring the costs:

• Daily
  

Step 3: Define data input

• Hourly internal cost of employee
• Sales price Consulting Hour 
  

Step 4: Perform GAP Analysis to evaluate input data not yet managed with ]po[

• Missing portlets to conveniently manage hourly rates 
  
  

Step 5 - Create Forms, Portlets and Reports in ]po[

• Create Portlet to manage default hourly rates for employees based on cost objects.
  
  Portlet on user page to set default hourly rate:
  
  
  
  Portlet on project page to overwrite default hourly rate:
  
  
  

•   Create report