BBP CO_001_02

G CONNECT Process Code BBP_CO_001_02

Business Blueprint

Process Owner: Core Te Team Me Member: Preared b!: $ers"on:2

T"#le: Con#roll"ng

Controlling Business Blue Print Document

CO()*%+(T*A,

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Mr. Anil Jhajharia Mr. Mundra Mr. Rajesh Agarwal Mr.Ch"nma!a B"swal %a#e:0&.0'.2010

G CONNECT Process Owner: Process Code BBP_CO_001_02

Business Blueprint

Core Team Member: Preared b!: $ers"on:2

T"#le: Con#roll"ng •


Document change control

version

document name

date

author

01

Con#roll"ng

2.0&.2010

Ch"nma!a B"swal

02

Con#roll"ng

0&.0'.2010

Ch"nma!a B"swal

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Business Blueprint


T"#le: Con#roll"ng


Contents Business blueprint overview...........................................................................................6 overview ...........................................................................................6 1.

Sap Sap con control trolli ling ng over overvi view ew.........................................................................................7 .........................................................................................7

2.

Con Control trolli ling ng are area....................................................................................................8

3.

Profit centers.......................................................................................................8

.

Cost Cost elem elemen entt acc accou ount ntin ing g.......................................................................................12 4.1.

!.

Process ove overview ........................ .................................... ........................ ........................ ........................ ......................... ......................... ....................... ........... 12

Cost Cost cent center er acco accoun unti ting ng.........................................................................................14 .........................................................................................14 5.1.

Process ove overview ........................ .................................... ........................ ........................ ........................ ......................... ......................... ....................... ........... 15

5.2. 5.2.

Cost Cost cen centre tre mas master ter ........................ ..................................... ......................... ........................ ........................ ........................ ................................ .................... 16

5.3. 5.3.

Cost Cost cen center ter cre crea ation tion........................ .................................... ........................ ........................ ........................ ......................... ............................... .................. 17

5.4. 5.4.

Cost Cost cent center er cate catego gori ries es........................ .................................... ........................ ......................... ......................... ........................ ........................... ............... 17

5.5. 5.5.

Cost Cost cen centre tre pla plan nnin ning....................... .................................... ......................... ........................ ........................ ........................ ......................... ................... ...... 17

".

#nternal or orders ...................................................................................................22

$.

Prof Profit it cen cente terr acco accoun unti ting ng........................................................................................27 ........................................................................................27

%.

&.

7.1. 7.1.

Prof Profit it cent center er assi assign gnme ment nt......................... ..................................... ........................ ........................ ......................... ......................... .......................27 ...........27

7.2. 7.2.

Prof Profit it cent center er numb number erin ing g....................... ................................... ......................... ......................... ........................ ........................ ..........................29 ..............29

Product co costing...................................................................................................32 8.1.

.................................... ........................ ........................ ........................ ......................... ......................... ....................... ........... 32 Process ove overview ........................

8.2. 8.2.

Stan Standa dard rd cost cost esti estima mate tess........................ .................................... ........................ ........................ ......................... ..................................... ........................ 33

8.3.

Cost compon ponents......................... ..................................... ........................ ........................ ........................ ......................... ................................... ...................... 33

8.4. 8.4.

Cost Costin ing g wit wit prod produc uctio tion n orde orders rs........................ .................................... ........................ ........................ ....................................... ........................... 36

8.5. 8.5.

Settl Settlem emen entt of of pro produ duct ctio ion n ord order erss.....................................................................................38

Prof Profit itab abil ilit ity y ana analy lysi siss.............................................................................................46

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Business Blueprint


T"#le: Con#roll"ng


1'.

(aps.............................................................................................................49

11.

Sign)off..........................................................................................................50

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Business Blueprint


T"#le: Con#roll"ng


*n#roduc#"on u#a ower "n-ras#ruc#ure l"m"#ed "s an es#abl"shed name "n #he manu-ac#ur"ng o- conduc#ors and cables.

An *3O /001:200 cer#"-"ed coman"es4 P*, o5er #he -"5e

decades4 #hrough "#s s#r"ngen# 6ual"#! con#rol4 cus#omer sa#"s-ac#"on and d"5ers"-"ed roduc# m"7 has reached a grow#h o#en#"al e 7ceed"ng rs.800 cores "n #he !ear 2009200/. *#s gamu# o-

roduc#s

"ncludes

o5erhead

conduc#or4

h#"# ower

cables4

con#rol

cables4 "ns#rumen#a#"on cables4 m"n"ng cables4 and sec"al cable and P3C oles. P*, has crea#ed "#s own +PC d"5"s"on -or rural elec#r"-"ca#"on wor; under B"ju ram"n aran =ojana "n remo#e areas o- Or"ssa #hereb! add"ng #o #he "n-ras#ruc#ure de5elomen# o- #he s#a#e. *n order #o handle cus#omer da#abase and ach"e5e e--ec#"5e sales P*, broadl! class"-"ed #he"r cus#omer as go5ernmen# and nongo5ernmen# organ"?a#"ons. go5ernmen# organ"?a#"on "ncludes ubl"c sec#or coman"es l";e ower gr"d corora#"on o- *nd"a4 s#a#e elec#r"cal boards and nongo5ernmen# organ"?a#"on "ncludes r"5a#e sec#or coman"es4 dealers e#c. P*, has major sales -rom go5ernmen# organ"?a#"on #rough #ender rocess"ng4 -ur#her sales class"-"ed "n #o domes#"c sale4 e7or# sale4 -ree o- charge del"5er!4 re#urns4 cred"#deb"# memo. A -ur#her e7or# sale "s segrega#ed as deemed e7or#4 d"rec# e7or#4 e7or# #hrough #h"rd ar#! @ e7or# under c#1.

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Business blueprint overview Th"s documen# summar"?es #he -"nd"ngs o- #he >P*T consul#"ng #eam and P*, #eam4 w"#h resec#s #o sa rocesses #o be "mlemen#ed a# P*,. The "n-orma#"on was ga#hered #hrough documen#s4 lan# 5"s"#s4 and d"scuss"on w"#h core #eam members. The urose o- bus"ness bluer"n# documen# "s #o reare #o mo5e -orward w"#h #he "mlemen#a#"on o- P*,s sa r s!s#em. A# #he conclus"on o- #he bluer"n#4 #he >P*T consul#an#s w"ll de#erm"ne #he sa - unc#"onal"#! re6u"red #o run #he P*, bus"ness. The bluer"n# resen#s a summar"?ed ersec#"5e o- all -unc#"onal bus"ness rocesses #ha# w"ll be "mlemen#ed. As such4 #he bluer"n# documen# w"ll ser5e 9 -rom #h"s o"n# -orward #he dual role o- bo#h o--"c"al rojec# scoe as well as s!s#em acce#ance cr"#er"a. The bod! o- #h"s documen# descr"bes #he organ"?a#"onal s#ruc#ure4 mas#er da#a4 re6u"remen#s g"5en b! P*, and r -unc#"onal rocess -lows #o be "mlemen#ed. The bluer"n# re"#era#es #he r organ"?a#"onal s#ruc#ures #ha# ha5e been "den#"-"ed and w"ll ser5e as #he bas"s -or #he "n"#"al con-"gura#"on ac#"5"#"es. The "n-orma#"on ga#hered and documen#ed "n #he bluer"n# "s su--"c"en# -or #he #eam #o go -orward "n#o #he real"?a#"on hase. owe5er4 "# "s cr"#"cal #ha# bo#h #he >P*T and P*, #eam agree on #he scoe o- #he rojec# as resen#ed "n #h"s documen#. Acce#ance 9 b! bo#h #eams 9 "s re6u"red #o mo5e #he rojec# "n#o #he ne7# hase.

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Business Blueprint

Preared b!: $ers"on:2

T"#le: Con#roll"ng

1.

Core Team Member:


Sap controlling overview Th"s cha#er br"e-l! descr"bes #he os# sa "mlemen#a#"on scenar"o a# P*,. *# broadl! ou#l"nes #he ma"ng and changes o- #he e7"s#"ng rocesses4 wh"ch need #o be e7ecu#ed #o ensure more e--"c"en#4 e--ec#"5e and s#reaml"ned rocesses. 3ome o- #he changes recommended are dr"5en b! sa4 wh"le some o- #he changes are an e--or# #owards a "ns#"#u#"onal"?"ng #he rocess or -or be##er con#rol. Con#roll"ng coD con#a"ns all accoun#"ng -unc#"ons necessar! -or e--ec#"5e con#roll"ng. *- an organ"?a#"on d"5"des accoun#"ng "n#o "n#ernal and e7#ernal 5"ewo"n#s4 co reresen#s #he "n#ernal accoun#"ng ersec#"5e4 because "# ro5"des "n-orma#"on -or managersE 9#hose who are "ns"de an organ"?a#"on and are charged w"#h d"rec#"ng and con#roll"ng "#s oera#"ons. Co "ncludes cos# and re5enue accoun#"ng. Co r"mar"l! d"5"des #he en#"re rocess "n#o #hree bas"c areas: •

*verhead cost controlling 9 ro5"des #ools #o answer #he 6ues#"on how do we

control our overhead costs+ •

Product cost controlling 9 ro5"des #ools #o answer #he 6ues#"on what is the

manufacturing cost of a product+ •

Profitability management 9 ro5"des #ools #o answer #he 6ues#"on how profitable

are individual mar,et segments+

These #hree rocesses are closel! l"n;ed and hel "n ro5"d"ng comrehens"5e manager"al accoun#"ng "n-orma#"on w"#hou# be"ng l"m"#ed #o legal re6u"remen#s. The organ"?a#"on and loca#"on s#ruc#ure o- P*, needs #o be maed #o #he organ"?a#"on en#"#"es "n sa r.

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Business Blueprint


T"#le: Con#roll"ng

2.

Core Team Member:


Controlling area A con#roll"ng area "s an organ"?a#"onal un"# w"#h"n co module. *# "s used -or cos# accoun#"ng. *# "s w"#h"n #he con#roll"ng area #ha# cos# cen#er h"erarch"es "s de-"ned and cos# cen#ers are ass"gned #o #hese. A con#roll"ng area ma! be ass"gned #o one coman! or #oo man! coman"es. *- !ou ass"gn a con#roll"ng area #o man! coman"es #hen !ou can do cross9 coman! cos# accoun#"ng. owe5er4 each coman! mus# ha5e #he same currenc! "n order #o be able #o do cross coman! cos# accoun#"ng and also same -"scal 5ar"an# ".e. same accoun#"ng er"odD. Fha# are #he ;e! dec"d"ng -ac#orsG •

Cos# accoun#"ng me#hod4 "n5en#or! 5alua#"on4 cos# cen#er s#ruc#ure "s d"--eren#

across legal en#"#"es. •

3.

char# o- accoun# and -"scal !ear 5ar"an#

Profit centers Pro-"# cen#er "s an organ"?a#"onal un"# "n accoun#"ng #ha# re-lec#s a managemen#9or"en#ed s#ruc#ure o- #he organ"?a#"on -or #he urose o- "n#ernal con#rol. The ma"n d"s#"nc#"on be#ween a ro-"# cen#er and cos# cen#er "s #ha#4 #!"call!4 cos# cen#ers w"ll ha5e onl! cos# comonen#sH ro-"# cen#ers ha5e re5enue as well as cos# comonen#s. Thus reor#"ng can done a# ro-"# cen#er le5el "n l"ne #he coman!Es P@, accoun#. The ro-"# cen#er grou reor#s w"ll also reresen# #he lan# le5el P@, ac. ro-"# cen#ers are crea#ed under a con#roll"ng area. Cos# cen#ers are l"n;ed #o ro-"# cen#ers. +n#r"es "n a ro-"# cen#er and coman! code are der"5ed #hrough #he l"n; #o cos# cen#er. An en#r! os#ed #o a cos# cen#er w"ll au#oma#"call! ge# dul"ca#ed "n ro-"# cen#er "- ro-"# cen#er "s a##ached #o a cos# cen#er. Fha# are #he ;e! dec"d"ng -ac#orsG •

ro-"# and loss accoun# and cer#a"n balance shee# "#ems -or e7amle s#oc;s4

rece"5ables4 a!ables and asse#s are #o be reor#ed -or managemen# reor#"ng as well as segmen#al reor#"ng as er #he as.

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Business Blueprint


T"#le: Con#roll"ng


(P#- epectations/ re0uirements from controlling module •

Ac#ual cos# o- "n5en#or! a# each s#age "n roduc#"on. e7amle ac#ual cos# o-

conduc#orcable "n w"re draw"ng s#age4 s#rand"ng s#age4 "nsula#"on s#age4 armor"ng s#age4 shee#"ng s#age4 re -"n"sh"ng s#age4 e#c. •

Manu-ac#ur"ng cos# o- conduc#or and cable.

•

*den#"-"ca#"on o- dear#men# w"se labor cos#4 -ac#or! o5erheads4 adm"n"s#ra#"on

o5erheads4 sell"ng and d"s#r"bu#"on o5erheads. Con#rol o5er #hese cos#s b! wa! o- -ormal lann"ng and budge#ar! con#rol s!s#em. •

*den#"-"ca#"on o- ma#er"al4 labor 5ar"ances a# each s#age "n roduc#"on rocess

comared #o s#andards and -"7"ng u # he resons"b"l"#! and accoun#ab"l"#! a# each le5el. •

cus#omer w"se4 d"5"s"on w"se ro-"#ab"l"#!4 mach"ne w"se ro-"#ab"l"#!

•

seara#e cos# "den#"-"ca#"on o- cer#a"n e7enses such as #elehone4 5eh"cles4

"nsurance cla"ms4 "nd"genous o- ma#er"als •

seara#e "den#"-"ca#"on o- ma"n#enance cos#

•

Reconc"l"a#"on o- ro-"#loss as er -"nanc"al accoun#s and as er cos# accoun#s.

•

Produc# cos#"ng "s re6u"red seara#el! -or #he #enders -or 6uo#"ng #he r"ce.

•

Pro-"#ab"l"#! anal!s"s reor# "s re6u"red b! #a;"ng "n #o cons"dera#"on o- sales orders

"n hand and also re6u"red a reor# b! #a;"ng "n#o cons"dera#"on o- -u#ure orders ".e. e7ec#ed orders.

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Business Blueprint


T"#le: Con#roll"ng

3.1.

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Core Team Member:

*rganiational Structure

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T"#le: Con#roll"ng

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Business Blueprint


T"#le: Con#roll"ng

.

Core Team Member:


Cost element accounting

.1. Process overview

Cos# elemen# accoun#"ng class"-"es #he cos#s and re5enues #ha# are os#ed #o co4 and ro5"des #he caab"l"#! -or reconc"l"a#"on o- cos#s "n co w"#h #he -"nanc"al accoun#"ng )*D module.

aster data Cost elements A cos# elemen# descr"bes #he na#ure o- cos#. *# ser5es #he -ollow"ng uroses: •

Pr"mar! cos# elemen#s are , accoun#s4 wh"ch would re6u"re a comulsor! cos# objec# whene5er #hese accoun#s are cred"#ed or deb"#ed.

•

The cos# cen#er  "n#ernal order #ransac#"ons shall be anal!?ed cos# elemen# w"se.

•

3econdar! cos# elemen#s are used -or alloca#"ons and se##lemen#s. These are no# reresen#ed b! , accoun#s "n )*. Based on #he #!e o- ac#"5"#! alloca#"ons4 #he secondar! cos# elemen#s shall be se# u a-#er #he alloca#"on log"c "s -"nal"?ed.

P*, has -"nal"?ed r"mar! cos# elemen#s w"#h #he )* re6u"remen#s -or ensur"ng #ha# #he cos# brea; u as re6u"red -or cos#"ng as well as reor#"ng re6u"remen#s could be ob#a"ned #hrough #he , "#sel-. These ha5e been segrega#ed "n#o d"rec# o5erheads4 -ac#or! o5erheads4 adm"n"s#ra#"5e4 sell"ng and d"s#r"bu#"on o5erheads so #ha# #hese could be os#ed #o #he rele5an# cos# cen#ers -or o5erhead cos#s reor#"ng.

Cost element groups Cos# elemen# grous can ser5e 5ar"ous uroses. )or e7amle4 #he! can be used #o crea#e reor#s or #o rocess se5eral cos# elemen#s "n one bus"ness #ransac#"on.

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The cos# elemen#s are groued "n#o •

Consum#"on

•

%"rec# rojec# e7enses

•

)ac#or! o5erheads

•

Adm"n"s#ra#"on o5erheads

•

3ales and d"s#r"bu#"on o5erheads

•

Re5enue

Cost element creation •

Cos# elemen# "s crea#ed "n a con#roll"ng area

•

Cos# elemen#s are #"me deendan# da#a. *n"#"al cos# elemen#s w"ll be crea#ed 5al"d -rom 01.0.200/

•

The au#hor"?a#"on -or crea#"ng and chang"ng #he cos# elemen# mas#er shall be w"#h #he accoun#s @ cos#"ng dear#men# a# head o--"ce

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•

Cos# elemen# code w"ll be e7#ernall! ass"gned dur"ng crea#"on

•

Cos# elemen# ca#egor"es

•

Pr"mar! cos# elemen#s ha5e been class"-"ed "n#o #he -ollow"ng ca#egor"es: 9

•

Pr"mar! cos#s 9 os#"ngs -rom )*

•

Accrual I ro5"s"ons "n co

•

3ales re5enue I os#"ngs -rom 3% #o ro-"#ab"l"#! anal!s"s

•

3ales deduc#"on 9 os#"ngs -rom 3% #o ro-"#ab"l"#! anal!s"s

•

3econdar! cos# elemen#s ha5e been class"-"ed "n#o # he -ollow"ng ca#egor"es: 9

•

Assessmen# I alloca#"ons -rom cos# cen#ers #o cos# cen#ers

•

*n#ernal se##lemen# 9 alloca#"ons -rom "n#ernal orders #o cos# cen#ers

•

*n#ernal ac#"5"#! alloca#"on I d"rec# alloca#"ons -rom cos# cen#ers #o roduc#

•

O5erhead I "nd"rec# alloca#"ons -rom cos# cen#ers #o roduc#

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Business Blueprint


T"#le: Con#roll"ng

!.


Cost center accounting

Organisational Structure

or Cost Center Controlling !rea Co#'an( Co"e

)usiness Con"uc !rea tor Con"uc )arunei tor $lant Ca-l Con"u e ctor $ro"uct $ro"uct Condu ion ion S % & cter S % & !"#in

!"#in

!ccount an" 

!ccount an" 

Ot+ers Ser

Ot+ers Ser

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)usiness !rea *as+i'ur $lant

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)usiness !rea Gu##a"i'oo n"i $lant

)usiness !rea ,E


Business Blueprint


T"#le: Con#roll"ng


!.1. Process overview

Con#roll"ng ro5"des cos# "n-orma#"on -or managemen# dec"s"on9ma;"ng. *# -ac"l"#a#es coord"na#"on4 mon"#or"ng and o#"m"?a#"on o- all rocesses "n an organ"?a#"on. Th"s "n5ol5es record"ng bo#h #he consum#"on o- roduc#"on -ac#ors and #he ser5"ces ro5"ded b! an organ"?a#"on. As well as documen#"ng ac#ual e5en#s4 #he ma"n #as; o- con#roll"ng "s lann"ng. $ar"ances w"ll be reor#ed b! comar"ng ac#ual da#a w"#h lan da#a. Pr"mar! #as;s re6u"red -or cos# cen#er accoun#"ng "nclude: •

Ma"n#a"n"ng cos# cen#er4 cos# elemen#4 and ac#"5"#! #!e mas#er da#a

•

Plann"ng dear#men#al and area cos#s b! cos# elemen# and cos# cen#er

•

Process"ng alloca#"ons o- cos#s b! means o- assessmen#s4 d"s#r"bu#"ons4 and o5erhead cos# calcula#"ons

•

Mon"#or"ng lan 5ersus ac#ual cos# e7end"#ures

•

Cos# cen#ers and a cos# cen#er s#ruc#ure w"ll be crea#ed #o sa#"s-! #he dear#men#al and organ"?a#"on s#ruc#ure o- #he coman!. (umerous cos# cen#er grous w"ll be de-"ned

•

Au#oma#ed ro-"# cen#er os#"ngs

•

3#andard sa ro-"# @ loss reor#"ng

3#andard sa reor#s w"ll mee# P*, reor#"ng re6u"remen#s The cos# cen#er accoun#"ng comonen# co9m"ca9ccaD #rac;s where cos#s occur "n #he organ"?a#"on. The cos# cen#er "s an organ"?a#"onal un"# "n a con#roll"ng area. Cos# cen#ers can be de-"ned -or each low9le5el organ"?a#"onal un"# #ha# has resons"b"l"#! -or manag"ng cos#s. As cos#s are "ncurred4 #he! are ass"gned or os#ed #o #he aror"a#e cos# cen#er.

CO()*%+(T*A,

Page 1& o- /


Business Blueprint


T"#le: Con#roll"ng


aster data

!.2. Cost centre master

A cos# cen#re reresen#s #he loca#"on o- cos# occurrence. *# can be se# u based on -unc#"on4 geograh"cal loca#"on4 area o- resons"b"l"#!4 ac#"5"#"es  ser5"ce ro5"ded or alloca#"on cr"#er"a. The cos# cen#re s#ruc#ure should ser5e #he -ollow"ng uroses: •

All reor#"ng re6u"remen#s wh"ch re6u"re cos#s #o be d"sla!ed seara#el! -or a dear#men# -unc#"on.

•

all alloca#"on re6u"remen#s #ha# re6u"re cos#s #o be "den#"-"ed seara#el! and u# "n seara#e buc;e#s such #ha# #he! could be d"rec#l! "c;ed u -or d"--eren# bas"s o- alloca#"on

•

The s#andard h"erarch! "s #he organ"?a#"on s#ruc#ure -rom #he cos# con#roll"ng o"n# o- 5"ew.

The cos# cen#er h"erarch! "s class"-"ed "n#o: 9

CO()*%+(T*A,

•

Produc#"on

•

Ma"n#enance

•

Ma#er"als

•

Jual"#!

•

,og"s#"cs

•

Projec#s

Page 1' o- /


Business Blueprint


T"#le: Con#roll"ng


!.3. Cost center creation

Cos# cen#er "s crea#ed "n a con#roll"ng area and ass"gned #o a coman! code. *n"#"al cos# cen#ers w"ll be crea#ed 5al"d -rom 01.0.200/.#he au#hor"?a#"on -or crea#"ng #he cos# cen#er mas#er shall be w"#h #he cos#"ng dear#men#. Cos# cen#er code w"ll be e7#ernall! ass"gned a# #he #"me o- crea#"on. +ach cos# cen#er w"ll be a##ached #o one ro-"# cen#er.

!.. Cost center categories

Cos# cen#ers ha5e been class"-"ed "n# o #he -ollow"ng ca#egor"es: 9 •

A adm"n"s#ra#"on

•

B branches

•

C e7ecu#"5e

•

% -"nance and accoun#s

•

+ log"s#"cs

•

) ma"n#enance

•

 mar;e#"ng @ sales

•

 ma#er"als

•

* rea"rs

•

< roduc#"on

•

> rojec#

•

, 6ual"#! assurance

!.!. Cost centre planning

The objec#"5e o- o5erhead lann"ng: 9

CO()*%+(T*A,

•

Cos# con#rol #hrough 5ar"ance anal!s"s

•

Calcula#"on o- roduc# cos# -or lann"ng urose

Page 18 o- /


Business Blueprint




Comu#a#"on o- #he budge#ed ro-"#ab"l"#!

A# resen#4 P*, does no# ha5e -ormal budge#ar! con#rol s!s#em. Fe are recommend"ng #he -ollow"ng s#es -or o5erhead cos# lann"ng: 9

14 5ctivity Planning The ac#"5"#"es o- roduc#"on cos# cen#ers such as labor hours and mach"ne hours w"ll be lanned a# #he beg"nn"ng o- #he !ear based on #he roduc#"on lan. The lanned ac#"5"#! -or labor and mach"ne w"ll be en#ered manuall! "n #he s!s#em.

24 Cost Planning The "nd"5"dual cos# cen#ers mus# lan #he cos# #o be "ncurred b! #hem -or #he lann"ng er"od. Cos#s "nclude #he labor cos#4 -ac#or! o5erheads4 adm"n"s#ra#"on o5erheads4 sell"ng and d"s#r"bu#"on o5erheads. The ac#ual o5erheads w"ll be comared w"#h #he lan #o calcula#e #he 5ar"ance. The lann"ng e7erc"se w"ll be carr"ed ou# a# #he beg"nn"ng o- e5er! !ear.

34 6ormula Planning ,abor cos# w"ll be lanned -or cos# cen#er based on #he a5erage labor cos# -or each ca#egor! o- emlo!ee.

4 5llocation *f Planned Costs The lanned o5erheads are alloca#ed #o #he roduc#"on cos# cen#ers. Alloca#"ons "nclude r"mar! cos# alloca#"ons 5"?. d"s#r"bu#"on and secondar! cos# alloca#"ons 5"?. assessmen#s.

!4 Planned 5ctivity Price Calculation The oera#"ng ra#e "s calcula#ed based on #he lanned labor cos# and mach"ne cos#. Th"s labor ra#e and mach"ne ra#e "s used "n roduc# cos# lann"ng #o arr"5e a# #he lanned cos# o- roduc#"on.

Primary postings

CO()*%+(T*A,

Page 1 o- /


Business Blueprint


T"#le: Con#roll"ng


Fhen #he ac#ual e7ense "s accoun#ed "n #he -" module4 #he cos#s are s"mul#aneousl! uda#ed -rom #he con#roll"ng ersec#"5e. *n case o- derec"a#"on #he asse# "s ass"gned #o a cos# cen#er and derec"a#"on "s deb"#ed #o "# a# #he er"od end.

CO()*%+(T*A,

Page 1/ o- /


Business Blueprint


T"#le: Con#roll"ng


anage cost center accounting

Maintain Cost centers Master Data

Begin Process

!

Maintain Cost center/Cost element plan values

CO()*%+(T*A,

Maintain Cost !lements Primary/"ec

Receive Postings from Other Modules

Page 20 o- /

Maintain Activity types codes/Rates Master Data

Correct miscoded epenses

Maintain Assessmen t Cycles "econdary

Perio d !nd Closi ng

Maintain Distri#ution Cycles

!nd Process

!


Business Blueprint


T"#le: Con#roll"ng


aintain cost center master

Crea#e cos# cen#er4 change4

>3014 >3024 >304 >304

data

d"sla! 4 dele#e 4d"sla!

>30&

change

Cost center master Data

Crea#e s#andard h"erarch!4

hierarchy

d"sla!

O>+O(

Diplay/entanance aintain cost element

Crea#e4change4d"sla!4

>,014 >,024 >,04 >,04

master data

dele#e4d"sla! change

>,0&

documen#s

aintain assessment cycles

Crea#e ac#ual assessmen#

3_A,R_800&82

c!cle

aintain distribution cycles

Crea#e ac#ual d"s#r"bu#"on

3_A,R_800&8&8

c!cle

aintain cost center/cost

Change cos# elemen#

element plan values

ac#"5"#! "nu# lann"ng4 d"sla!

CO()*%+(T*A,

Page 21 o- /

>P0'4 >P08


Business Blueprint


T"#le: Con#roll"ng

".

Core Team Member:


#nternal orders

Process overview *n#ernal orders are cos# objec#s w"#h"n sa #he urose o- wh"ch "s #o ac# as a cos# collec#or #o collec# cos#s and anal!?e #hem aga"ns# a budge#. The cos#s can #hen ul#"ma#el! be se##led #o ano#her cos# objec#4 a gl accoun#4 e#c.4 deend"ng uon #he bus"ness rocess re6u"remen#. P*, w"ll be us"ng "n#ernal orders as cos# collec#ors -or #he -ollow"ng bus"ness rocesses. •

Ca"#al "n5es#men#s

•

Mar;e#"ng and sales

•

Re rojec#s

•

$eh"cles

•

O#her

3#andard sa reor#s w"ll mee# P*, reor#"ng re6u"remen#s An "n#ernal order "s an e7#remel! -le7"ble co #ool #ha# can be used -or a w"de 5ar"e#! o- uroses #o #rac; cos#s w"#h"n a con#roll"ng area. *n#ernal orders ro5"de caab"l"#"es -or lann"ng4 mon"#or"ng4 and alloca#"on o- cos#s. Cos#s are budge#ed -or each e5en#  ac#"5"#! and a5a"lab"l"#! chec; w"ll be ac#"5a#ed. Ac#"5e a5a"lab"l"#! con#rol means #ha# #he s!s#em re5en#s #he os#"ng o- #ransac#"ons #ha# e7ceed #he budge#. Broadl! #he "n#ernal orders w"ll be class"-"ed "n#o

CO()*%+(T*A,

•


•

Telehone

•

$eh"cles

•

Re rojec#s

Page 22 o- /


Business Blueprint


T"#le: Con#roll"ng


Ca"#al e7enses order w"ll be crea#ed as Ks#a#"s#"calL #o con#rol #he ca"#al budge#s. $eh"cles 9 seara#e orders w"ll be crea#ed -or each 5eh"cle where"n #he en#"re 5eh"cle rela#ed cos# would be accumula#ed. Telehones 9 seara#e orders w"ll be crea#ed -or #elehones where"n #he mon#hl! e7ense could be os#ed. The #o#al cos# o- #elehones and 5eh"cles on accoun# o- #he abo5e can be accessed b! crea#"ng "n#ernal order grous.

Planning A# #he !ear beg"nn"ng #he "n#ernal orders -or 5eh"cles and #elehone w"ll be crea#ed and #he lanned cos# -or #he !ear w"ll be en#ered. Budge# a5a"lab"l"#! con#rol w"ll no# be used.

Settlement of internal order A# #he er"od end #he cos# collec#ed "n #he "n#ernal orders w"ll be se##led #o #he cos# cen#er.

Decisions •

All loca#"ons w"ll use "n#ernal orders.

•

All ca"#al urchases and "n5es#men#s w"ll be made us"ng "n#ernal orders #o allow

budge#"ng4 use o- a5a"lab"l"#! con#rol #o a5o"d an! o5erruns on ca"#al rojec#s •

Plan#4 ro-"# cen#er @ -unc#"onal area w"ll be re6u"red #o be en#ered when crea#"ng

an "n#ernal order •

Release rocedure ma#r"7 -or ca"#al urchases w"ll be "mlemen#ed "n ma#er"als

managemen# -or aror"a#e aro5al le5els •

)or "n5es#men# orders4 asse# under cons#ruc#"on w"ll be crea#ed -rom #he "n#ernal

order when a new "n#ernal order "s crea#ed

CO()*%+(T*A,

•

)ollow"ng "n#ernal order #!es w"ll be crea#ed "n # he s!s#em:

•


•

Mar;e#"ng and sales

Page 2 o- /


Business Blueprint


T"#le: Con#roll"ng


•

O#her o5erhead

•

Re rojec#s

•

$eh"cles

•

Ma"n#enance wor;

•

Re rojec#s w"ll be con-"gured #o allow os#"ng o- re5enues #o #h e "n#ernal order

•

AC w"ll be ma"n#a"ned #hrough "n#ernal order on Nca"#al "n5es#men#E order.

•

(umber ranges are ma"n#a"ned a# "n#ernal order #!es4 and w"ll be commun"ca#ed

#o accoun#"ng BPOs. Recommenda#"on on number ranges -or "n#ernal orders -rom accoun#"ng BPOs I "- number ranges could s#ar# w"#h same number as cos# cen#er ca#egor!. •

*n#ernal order numbers w"ll be "n#ernall! genera#ed b! #he s!s#em  "n#ernal

number ass"gnmen#D •

AC clear"ng accoun# w"ll be used -or cos#s collec#"ons on "n#ernal orders. Par#"al

se##lemen# -rom "n#ernal orders #o ACs w"ll clear AC clear"ng accoun# P@, accoun#D. 3e##lemen# rules can be ma"n#a"ned "n ercen#ages or amoun#. )ull  -"nal se##lemen# rules w"ll be ma"n#a"ned on "n#ernal orders #o mo5e ACs #o -"7ed asse#s -rom one or mul#"le asse# classes. •

AC clear"ng accoun# w"ll be de-aul#ed on urchase re6u"s"#"on  urchase order

l"ne "#ems based on accoun# ass"gnmen# -or "n#ernal order. •

)ollow"ng 5al"da#"on rules w"ll be bu"l# around "n#ernal order  u rchase re6u"s"#"ons

urchase ordersD:

(o#e:

•

*- "n#ernal order used on urchase re6u"s"#"on orderD "s Nca"#al "n5es#men#E order

#!e4 #hen onl! NAC clear"ng accoun#E w"ll be used on accoun# ass"gnmen# •

*- "n#ernal order used on urchase re6u"s"#"on orderD "s no# Nca"#al "n5es#men#E

order #!e4 #hen NAC clear"ng accoun#E canno# be used on accoun# ass"gnmen#.

CO()*%+(T*A,

Page 2 o- /


Business Blueprint


T"#le: Con#roll"ng


anagement of internal orders flow

Beg"n Process

(ormal Or 3#a#"s#" cal

Crea#e *n#ernal Order

7o

+n#er PlanBudge# $er"-! da#a @ Release

Commun"ca #e #ha# order "s released

!

8es Crea#e 3e##lemen# Rules

!

Pos# Ac#"5"#"es #o *n#ernal Orders

Re5"ew Cos#s On *n#ernal Orders

3e##le *n#ernal

+7ecu#e *n#ernal Order Reor#s

%nternal Order Reports

CO()*%+(T*A,

Page 2& o- /

Close Comle#ed *nternal

+nd Process


Business Blueprint


T"#le: Con#roll"ng


anagement of internal orders description

*n#ernal order

Crea#e "n#ernal order

>O01

*n#ernal order

Change4 d"sla!4 lann"ng

>O024 >O04 >P)'

cos# elemen#sac#"5"#! "nu# change *n#ernal order

+n#er budge#s -or "n#ernal

>O22

order Ac#"5"#! alloca#"on

+n#er d"rec# ac#"5"#!

>B21(

alloca#"on Ac#"5"#! alloca#"on

%"sla! ac#ual cos# l"ne

>OB1

"#ems -or orders $ar"ance

Orders ac#uallan5ar"ance

3_A,R_8012//

Ac#ual alloca#"on

Orders: ac#ual l"ne "#ems

>OB1

$ar"ance

Budge#ac#ualcomm"#men#s

3_A,R_80101/

*n#ernal order

Change "n#ernal order

>O02

CO()*%+(T*A,

Page 2' o- /


Business Blueprint


T"#le: Con#roll"ng

$.

Core Team Member:


Profit center accounting

Process overview Pro-"# cen#ers are areas o- resons"b"l"#! w"#h"n a coman! -or re5enues and e7enses4 as well as cer#a"n asse#s and l"ab"l"#"es "n some cases. All ro-"# cen#ers are arranged "n#o a s#andard h"erarch! reresen#"ng #he en#"re organ"?a#"on. A# #he end o- each mon#h4 #he ro-"# and loss s#a#emen# @ balance shee# are reor#ed -or #he segmen#s as er #he segmen#al reor#"ng.

$.1. Profit center assignment

Pro-"# cen#er "s no# en#ered dur"ng e7enses and re5enue #ransac#"on "# "s alwa!s der"5ed -rom #he co objec#s such as cos# cen#er4 roduc#"on order.

Standard sap reports will meet (P#- reporting re0uirements A ro-"# cen#er "s an organ"?a#"onal un"# "n -"nanc"al accoun#"ng #ha# re-lec#s a managemen#9 or"en#ed s#ruc#ure o- #he organ"?a#"on -or #he urose o- "n#ernal con#rol. Pro-"# cen#ers are organ"?ed "n a s#andard h"erarch!H howe5er4 al#erna#"5e h"erarch"es can be es#abl"shed -or reor#"ng urose. P*, w"ll ha5e ro-"# cen#ers based on re6u"remen#s -or P@, and B@3 s#a#emen#s. +ach coman! w"ll ha5e #he"r own s#ruc#ure o- ro-"# cen#ers wh"ch w"ll -ollow #he s#andard nam"ng con5en#"ons. P*, w"ll oula#e segmen# as a re6u"red -"eld4 so #ha# reor#"ng b! segmen#s w"ll also be oss"ble. •

P*, w"ll ge# #he ro-"# and loss s#a#emen# a# #he ro-"# cen#er le5el. Comle#e balance shee#s w"ll also be a5a"lable -or each ro-"# cen#er.

•

P*, w"ll use documen# sl"##"ng -unc#"onal"#! #o der"5e ro-"# cen#ers when os#"ng -"nanc"al documen#s #o crea#e comle#e -"nanc"al s#a#emen#s a# #he ro-"# cen#er le5el

CO()*%+(T*A,

Page 28 o- /


Business Blueprint


T"#le: Con#roll"ng


$.2. Profit center numbering

P*, has dec"ded #o crea#e and name ro-"# cen#ers b! a comb"na#"on o- lan# loca#"on and #he roduc# l"ne.

Please re-er #o #he Norgan"?a#"on s#ruc#ureE sec#"on #o see #he ro-"#

cen#er h"erarch! -or P*,. )ollow"ng ro-"# cen#er number"ng con5en#"on has been used:

CO()*%+(T*A,

•

BAR(+*: CAB11

•

BAR(+*: CO(11

•

>A3*PR: CAB12

•

>A3*PR: CO(12

•

MMA%*P(%*: CAB1

•

MMA%*P(%*: CO(1

•

RRA, +,+CTR*)*CAT*O(: R+1

Page 2 o- /


Business Blueprint


T"#le: Con#roll"ng


anage profit center accounting process flow

Begin Process

Ma"n#a"n Pro-"# cen#er Mas#er da#a

Plan cos# @ Re5enue $alues

Ma"n#a"n 3ubs#"#u#"on Rules Ma"n#a"n MMCO o5err"desD

Planned Cos# +lemen# load Budge#D

>e! dec"s"ons: P*, w"ll be us"ng "n#egra#ed PCA w"#h new general ledger

CO()*%+(T*A,

•

Cable

•

Conduc#or

Page 2/ o- /

Rece"5e Pos#"ngs -rom O#her Modules

Mon#h +nd Close

!nd Process


Business Blueprint


T"#le: Con#roll"ng

ro-"# cen#er

crea#e ro-"# cen#er grou

Pro-"# cen#er

Pro-"# cen#er d"sla!

Pro-"# cen#er

Crea#e ro-"# cen#er4

>C1

4 >C'( >+&14 >+&24 >+&4 >+&

change 4d"sla! 4dele#e Pro-"# cen#er

Change s#andard h"erarch!

>C&(

Pro-"# cen#er

Change lan cos#sre5enue4

8>+14 8>+2

d"sla! Pro-"# cen#er

Trans-er lan da#a #o PCA

1>+0

Pro-"# cen#er

Change

>+&2

CO()*%+(T*A,

Page 0 o- /



Business Blueprint


T"#le: Con#roll"ng

%.

%.1.

Core Team Member:


Product costing

Process overview

Produc# cos#"ng module "n sa allows crea#"on and e7ecu#"on o- roduc# cos# es#"ma#es based on arame#ers and mas#er da#a objec#s -rom ma#er"als managemen#4 roduc#"on lann"ng4 and con#roll"ng modules o- sa. The s#andard cos# es#"ma#e a##em#s # o calcula#e #he cos# o- goods manu-ac#ured or cos# o- goods sold us"ng #he 6uan#"#! s#ruc#ure and 5alua#"on s#ruc#ure w"#h"n #he r s!s#em and uda#es #he s#andard r"ce o- # he roduc# "n #he ma#er"al mas#er. The s!s#em uses a cos#"ng 5ar"an#4 wh"ch 'holds #he arame#ers o- how #he roduc# "s #o be cos#ed and uda#ed. The s!s#em shows d"--eren# 5"ews o- #he cos# sl"# us"ng #he cos# comonen# s#ruc#ure and "#em"?a#"on 5"ews. The roduc# cos# can be bro;en u "n#o #he -ollow"ng comonen#s: •

%"rec# ma#er"al

•

%"rec# labor

•

+7#ernal rocess"ng o5D

•

)"7ed o5erheads "ncludes -"7ed o5erheads and derec"a#"on o5erheadsD

•

$ar"able o5erheads

3#andard cos# es#"ma#e based on #he re6u"remen#s "s r"mar"l! "n l"ne w"#h #he P*, con-"gura#"on. All ma#er"als regardless o- whe#her manu-ac#ured "n house or rocured e7#ernall! w"ll be 5alued a# s#andard. )u#ure cos# es#"ma#es w"ll be rolled ou# once "n e5er! !ear re5alu"ng #he"r s#andards. Curren# rocess 3#andard sa reor#s w"ll mee# P*, reor#"ng re6u"remen#s The roduc# cos#"ng w"ll co5er #he -ollow"ng bus"ness rocesses:

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng

•


For;"ng ou# cos# es#"ma#es based on s#andard b"ll o- ma#er"al and rou#"ngs -or conduc#ors and cables.

%.2.

•

wor;"ng ou# #he cos# o- "n#ermed"ar! and -"n"shed roduc#s

•

F*P 5alua#"on

•

*n-orma#"on Re6u"remen#s

Standard cost estimates

The s#andard cos# es#"ma#es shall be used -or #he -ollow"ng uroses:9 •

$alua#"on o- -"n"shed roduc#s #"ll "# " s re5alua#ed based on ac#ual cos#s.

•

+ach roduc# shall ha5e a b"ll o- ma#er"al  rou#"ng wh"ch shall con#a"n #he s#andard ma#er"al re6u"remen# and rocess -or roduc#"on o- a s#andard 6uan#"# !.

•

As re6u"red4 #he s!s#em shall ro5"de mul#"le cos#"ng runs on #he bas"s o- #he selec#"on o- al#erna#"5e b"ll o- ma#er"al  rou#"ngs w"#hou# an! re-erence #o an! sec"-"c roduc#"on order.

3#andard cos# es#"ma#es w"ll be calcula#ed a# #he beg"nn"ng o- #he !ear -or all #he sem" -"n"shed and -"n"shed ma#er"al. The s#andard cos# es#"ma#es w"ll be re5"sed e5er! !ear. The lo# s"?e -or s#andard cos# calcula#"ons w"ll be dec"ded dur"ng real"?a#"on hase.

%.3.

Cost components

9aw material cost The BOM con#a"ns #he s#andard ma#er"al -or manu-ac#ur"ng an "n#ermed"a#e or -"n"shed roduc#. The RM ra#es w"ll be ma"n#a"ned "n lanned r"ce 1 "n ma#er"al mas#er -or calcula#"on o- 3T% ma#er"al cos#.

9aw material costing for imported material

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


*n case o- "mor#ed ma#er"al raw ma#er"al cos#"ng w"ll be carr"ed ou#4 #he urchas"ng "n-o records w"ll be used #o arr"5e a# #he RM r"ce.

-abor cost ,abor cos# based on #he lanned ac#"5"#! ra#es and s#d. hours -rom oera#"ons. The wor; cen#ers "n roduc#"on are maed w"#h #he cos# cen#er "n con#roll"ng -or charg"ng #he labor cos#. +7amle o- wor; cen#er and cos# cen#er ass"gnmen# ,abor cos# "ncludes cos#s such as •

Fages 9 bas"c  %A

•

Casual wages

•

Bonus

•

+79 gra#"a a!men#

•

3alar"es 9 bas"c  %A

•

ra#u"#!

•

ouse ren# allowance

•

,ea5e salar!

•

,ea5e #ra5el ass"s#ance

•

3ec"al allowance

•

P.-. +m con#

•

P.-. Ad charges

achine cost Mach"ne cos# w"ll be calcula#ed based on #he lanned ac#"5"#! ra#es and s#d. hours -rom oera#"ons -or conduc#ors and cables. The -ollow"ng cos# w"ll be cons"dered -or calcula#"on o- mach"ne cos# "n cos# cen#er lann"ng. •

CO()*%+(T*A,

+lec#r"c charges 9 lan#

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Business Blueprint



)uel4 o"l and gas

•

%erec"a#"on

•

,"cense -ees


Direct overheads %"rec# o5erheads w"ll be charged #o roduc# based on #he lanned ercen#age o- ma#er"al consum#"on. %"rec# o5erheads "nclude cos#s such as: •

+lec#r"c"#! charges 9 -ac#or!

•

)uel 4 o"l and gas

6actory overheads )ac#or! o5erheads w"ll be charged #o roduc# based on #he lanned ercen#age o- ma#er"al cos# and labor cos#. The ercen#age w"ll be arr"5ed ou#s"de sa s!s#em and w"ll be en#ered "n sa. )ac#or! o5erheads "nclude cos#s such as: •

,ab #es#"ng charges

•

Tes# charges 9 #h"rd ar#! "nsec#"on

•

Rea"rs @ ma"n#enance 9  @ m

•

*nsec#"on 9 -"n"shed goods

•

*nsec#"on 9 raw ma#er"als  s#ores

•

%erec"a#"on9 ma#er"al handl"ng e6u"men#

:he percentage will be arrived outside sap system and will be entered in sap 5dministration overheads Adm"n"s#ra#"on o5erheads w"ll be charged onl! -"nal roduc# based on #he lanned ercen#age o- ma#er"al cos#.

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


:he percentage will be arrived outside sap system and will be entered in sap.

%..

Costing with production orders

3eara#e roduc#"on order w"ll be crea#ed -or each -"n"shed and "n#ermed"a#e s#oc;. *n#ermed"ar! s#oc; re-ers #o s#oc; #ha# has been roduced and "s ma"n#a"ned "n s#oc; -or use "n ano#her rocess.

Planned costing of production orders Fhen #he roduc#"on order "s released4 # he lanned cos# "s calcula#ed as -ollows:9

cost component

0uantity

rate

Ma#er"al

3#andard BOM

lanned r"ce -rom ma#er"al

value 6uan#"#! 7 ra#e

mas#er lanned 1D ,abour cos#

3#andard ac#"5"#"es "n

lanned ac#"5"#! r"ce

6uan#"#! 7 ra#e

lanned ac#"5"#! r"ce

6uan#"#! 7 ra#e

lanned ercen#age ra#es

ma#er"al

rou#"ng Mach"ne cos#

3#andard ac#"5"#"es "n rou#"ng

%"rec# o5erheads

(A

consum#"onD7 lanned  )ac#or! o5erheads

(A


ma#er"al  labour cos# 7 lanned 

Adm"n"s#ra#"on

(A

o5erheads


ma#er"al cos# 7 lanned 

The lanned cos#s w"ll be a5a"lable -or comar"son w"#h #he ac#ual cos#s "n #he roduc#"on order.

5ctual cost in production orders

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


aterial cost The ma#er"al cos#s are calcula#ed s"mul#aneous w"#h #he sho -loor ac#"5"#"es. *n case o- conduc#orscables manu-ac#ur"ng #he s#andard 6uan#"#! o- ma#er"al w"ll be con-"rmed "n roduc#"on order. 3T% 6#!QmaD w"ll be charged #o roduc#"on order. #he d"--erence be#ween #he h!s"cal 6uan#"#! and boo; 6uan#"#! w"ll be charged #o Nh!s"cal 5er"-"ca#"on d"--erence accoun# N or "# w"ll be "ssued #o cos# objec# and d"s#r"bu#ed #o roduc#"on orders "n roor#"on #o #arge# 6#! o- ma#er"al consumed

-abor cost 3T% labor hours w"ll be con-"rmed "n all #he roduc#"on orders. The labor cos# lanned ra#e Q 3T% hoursD w"ll be charged #o roduc#"on order

achine cost *n case o- conduc#orcable roduc#"on order4 3T% mach"ne hours w"ll be con-"rmed. The mach"ne cos# lanned ra#e Q 3T% hoursD w"ll be charged #o roduc#"on order.

Direct overheads; factory overheads; administration overheads Per"od"call! #he ac#ual o5erheads w"ll be calcula#ed -or #he roduc#"on order based on #he lanned ercen#age. The roduc#"on order w"ll be deb"#ed w"#h o5erheads and #he o5erhead cos# cen#er w"ll be cred"#ed.

The s!s#em shall

uda#e #he 6uan#"#"es o- #he -"n"shed roduc# a# # he 3T% ra#e -rom #he ma#er"al mas#er.

=or, in process All #he roduc#"on orders w"ll be comle#ed a# #he er"od end. The F*P w"ll be calcula#ed onl! "n case o- roduc#"on orders where "n #he s#a#us "s Kar#"al comle#eL ".e. "n case o- m"ss"ng ar#s.

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


The F*P w"ll be os#ed "n )" based on #he ac#ual cos# boo;ed "n #he order a# #he er"od end.

%.!.

Settlement of production orders

All #he roduc#"on orders w"ll be se##led a# #he er"od end. The 5ar"ance w"ll be #rans-erred #o co9a and #he d"--erence be#ween #he ac#ual cos# and s#andard cos# w"ll be #rans-erred #o Kr"ce d"--erence accoun#L #he con#ra en#r! w"ll be shown "n Kchange "n s#oc; accoun#L

5ctual costing %ur"ng se##lemen# a# #he mon#h end4 #he s!s#em shall de#erm"ne #he s#oc; on hand and accord"ngl! uda#e s#oc; 5alues. The balance amoun# er#a"n"ng #o -"n"sh goods s#oc; #ha# has alread! been sold shall be deb"#ed #o a seara#e r"ce d"--erence accoun#. Th"s r"ce d"--erence accoun# would be al"ed -or "n#ermed"ar! roduc#s also4 and #here-ore4 #he cos#"ng o- #he -"n"shed roduc# con#a"n"ng #he "n#ermed"ar! s#oc; "s re5alued. The "n5en#or! w"ll be deb"#ed cred"#ed and #he Kr"ce d"--erence accoun#L w"ll be %r Cr. accord"ngl!.

Summaried analysis of production orders The ac#ual roduc#"on orders need #o be summar"?ed a# #he end o- #he er"od. The summar"?a#"on shall be -or a lan#  ma#er"al comb"na#"on. The "n-orma#"on re6u"red "s #he ac#ual cos# and #he 5ar"ance anal!s"s.

>ighlights

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


•

Raw ma#er"als are 5alued a# s#andard ra#e due #o () me#al r"c"ng.

•

*n9house manu-ac#ured "n#ermed"ar! and -"n"shed goods are 5alued a# s#andard ra#e w"#h er"od"c 5alua#"on o- ac#ual cos#.

•

,abor cos# a# lanned ra#e

•

%"rec#4 -ac#or!4 adm"n"s#ra#"on o5erheads a# lanned ercen#age der"5ed ou#s"de sa s!s#em.

Product Cost Planning ? @stimating 6low

Begin Process

Crea#e @ Ma"n#a"n BOMEs

Crea#e @ Ma"n#a"n Rou#"ngs

Ma"n#a"n Ac#"5"#! @ O5erhead Ra#es

Crea#e Cos# +s#"ma#es Mar; Cos# +s#"ma#es

Release Cos#

!nd Process

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


Product Cost Planning ? @stimating 6low cost planning

ma"n#a"n ac#"5"#! ra#es

>P2'

cos# es#"ma#e

crea#e cos# es#"ma#e

C>11(

cos#"ng run

ed"# cos#"ng run

C>0(

cos#"ng run

mar; cos# es#"ma#es

C>2

cos#"ng run

release cos# es#"ma#es

C>2

onth @nd Process A :* ? :S Production *rders

3#ar#

Change F*P 3e##lemen # Per"od

Calcula#e @ Pos# F*P

Calcula#e $ar"ances -or Produc#"on Orders

3e##le Produc#"on Orders

+nd

onth @nd Process A :* Sales *rders

3#ar#

CO()*%+(T*A,

Change F*P 3e##lemen# Per"od

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Calcula#e @ Pos# F*P @ Resul#s Anal!s"s

3e##le 3ales Orders +nd


Business Blueprint


T"#le: Con#roll"ng


onth @nd Close Mon#h end wor; "n rocess

Change and se# #he er"od

>>AO

con#rol -or wor; "n rocess Mon#h end wor; "n rocess

Calcula#e @ os# F*P -or

>>AO

roduc#"on orders. Mon#h end wor; "n rocess

Calcula#e 5ar"ances on

>>31

roduc#"on orders 3e##le roduc#"on

3e##le roduc#"on orders

CO

Calcula#e @ os# F*P


>>A>

sales orders 3e##le sales

3e##le sales orders

$A

Mon#h end wor; "n rocess

Change and se# #he er"od

>>A0

con#rol -or wor; "n rocess Mon#h end wor; "n rocess


>>3&

roduc# cos# collec#ors Mon#h end wor; "n rocess

Calcula#e 5ar"ances on

CO

roduc# cos# collec#ors

ey 6actors •

The 5alua#"on 5ar"an# #o crea#e cos# es#"ma#es w"ll - "rs# loo; a# #he lanned r"ce 1 -"eld "n #he cos#"ng 2 5"ew o- ma#er"al mas#er4 #hen #he urchase "n-o record when calcula#"ng new s#andards -or raw ma#er"als.

•

3#andard cos#s o- sem"9-"n"shed and -"n"shed ma#er"als w"ll be calcula#ed b! e7lod"ng #he BOM and #he rou#"ng -or #he ma#er"al

CO()*%+(T*A,

•

O5erhead w"ll be al"ed us"ng cos#"ng shee#.

•

)ollow"ng ac#"5"#! #!es w"ll be crea#ed "n #he s!s#em:

•

3e#u

•

Mach"ne

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Business Blueprint


T"#le: Con#roll"ng


•

,abor

•

Ac#"5"#! ra#es -or cos# cen#ers w"ll be calcula#ed ou#s"de and ma"n#a"ned manuall! "n #he s!s#em

•

3#andard cos#"ng 5ar"an# #o calcula#e #he s#andard cos# #o release and 5alua#e #he "n5en#or!

•

Curren# cos#"ng 5ar"an# #o calcula#e #he curren# s#andard cos# #o uda#e #he lanned r"ce or #a7 r"ce -"eld "n #he ma#er"al mas#er

•

Comb"na#"on o- ac#ual "ssues and bac; -lush"ng w"ll be used -or ca#ur"ng ma#er"al consum#"on on roduc#"on orders

•

,abor hours con-"rma#"ons 9 s#andard hours could be bac; -lushed -rom rou#"ngsD -or all P*, loca#"ons.

•

P*, w"ll u#"l"?e cos# objec# con#roll"ng w"#h roduc#"on orders w"#h comle#e rocesses con-"gured -or wor; "n rocess calcula#"ons4 5ar"ance anal!s"s and se##lemen#s.

•

$ar"ance calcula#"ons  se##lemen#s w"ll be scheduled #o run e5er! wee; -or anal!s"s

•

F*P calcula#"ons  se##lemen#s w"ll be carr"ed ou# wee;l!mon#hl!

•

All roduc#"on 5ar"ances w"ll be anal!?ed and se##led #o ro-"#ab"l"#! anal!s"s

•

MR21 manual r"ce changesD #ransac#"on access w"ll be res#r"c#ed recommenda#"on "s no# #o use mr21 #ransac#"onD. All ma#er"al s#andard r"ces w"ll be based on s#andard cos# rollu.

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


:ender price •

Juo#a#"on r"ce w"ll be dec"ded based on # he cos#"ng and subm"#s #he #ender.

•

Pr"ce "n 6uo#a#"on "s ;e! -ac#or "n #ender rocess"ng4 P*, re-ers #he -ollow"ng o"n#s wh"le dec"d"ng #he 6uo#a#"on r"ce: •

Raw ma#er"al r"ce

•

Con5ers"on cos#

•

)re"gh#

•

)"nanc"al cos# B and o#hersD

•

Ad5ances w"#h "n#eres# or w"#hou# "n#eres#D

•

%el"5er! er"od

•

B"d 5al"d"#!

•

Mode o- a!men# ,C or d"rec#D

•

(o o- da!s -or a!men# collec#"on

•

O#her adm"n"s#ra#"5e cos#

(o#e: reor# "s re6u"red ha5"ng all #he abo5e "n-orma#"on -or #a;"ng #he dec"s"on on 6uo#e r"ce.

Price firm/variable )ollow"ng are #he "n-luen#"al -ac#ors "n #a;"ng dec"s"on abou# #he r"ce e7ec#ed #o be 6uo#ed "n #he #ender -or 5ar"able order. •

Base da#e

•

Pr"ce o- raw ma#er"al

•

*n#eres# on RM -rom ) hold"ng da#e #o a!men# collec#"onD.

•

Par#!Es a!men# collec#"on #"me. #erms o- a!men#9-or calcula#"on o- "n#eres# on raw ma#er"alD

CO()*%+(T*A,

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Business Blueprint




)or s"gh# ,C4 "n#eres# on raw m a#er"al "s ?ero and -or sance ,C4 "n#eres# charges are deend"ng on #erms and cond"#"ons.

•

Pa!men# #erms ,C or d"rec#D •

*- "# "s ,C sance ,C or s"gh# ,C

•

sance ,C4 #hen wha# "s er"od  '0 da!s or /0 da!sD

•

Fho w"ll bear ad5anceG

•

)"nanc"al cos# I ban; guaran#ee cos#

•

Ad5ance "s g"5en w"#h "n#eres# or w"#hou# "n#eres#.

•

3ecur"#! deos"# I ban; guaran#ee I oen"ng -ee4 "n#eres#

•

Comm"ss"on "- P*, need #o g"5e.

•

%el"5er! er"od

Aar# -rom abo5e -ac#ors o#her -ac#ors need #o judge area as -ollows A. O#her rosec#"5e come#"#or r"ce -or #ha# same or s"m"lar ma#er"al. B. ,as# #ender r"ce -or same "#em an!where "n *nd"a. C. ,as# #ender -or #ha# same roduc# or s"m"lar roduc# o-

#ha#

ar#"cular

cus#omerdes#"na#"on. 3"m"larl! -or #ender bus"ness under -"rm order all abo5e "ssues should be #a;en "n #o cons"dera#"on e7ce# base da#e. 3"nce #he bus"ness P*, "s go"ng #o ge# "s -or -"rm order r"ce 5ar"ance does no# comes "n #o "c#ure hence base da#e "s no# re6u"red. owe5er del"5er! er"od and 5al"d"#! should be re-erred wh"le #a;"ng dec"s"on on r"ce. )ollow"ng are #he "n-luen#"al -ac#ors "n #a;"ng dec"s"on abou# #he r"ce e7ec#ed #o be 6uo#ed "n #he #ender -or -"rm order.

CO()*%+(T*A,

•

Pr"ce o- raw ma#er"al

•

Manu-ac#ur"ng and adm"n"s#ra#"on e7enses.

•

Pa!men# #erms ,C or d"rec#D •

*- "# "s ,C sance ,C or s"gh# ,C

•

sance ,C4 #hen wha# "s er"od  '0 da!s or /0 da!sD

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Business Blueprint


T"#le: Con#roll"ng

CO()*%+(T*A,

Core Team Member:


•

Fho w"ll bear ad5anceG

•

Ad5ance "s g"5en w"#h "n#eres# or w"#hou# "n#eres#.

•

Par#!Es a!men# collec#"on #"me. #erms o- a!men#D

•

*n#eres# on raw ma#er"al

•

3ecur"#! deos"# "s #here or no#.

•

Comm"ss"on "- P*, need #o g"5e.

•

%el"5er! er"od

•

B"d 5al"d"#!

•

$al"d"#! -or 6uo#a#"on

•

Aar# -rom abo5e -ac#ors o#her -ac#ors need #o judge are as -ollows:

•

O#her rosec#"5e come#"#or r"ce -or #ha# s"m"lar "#em.

•

,as# #ender r"ce -or same "#em an!where "n *nd"a.

•

,as# #ender -or #ha# ar#"cular cus#omer.

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Business Blueprint


T"#le: Con#roll"ng

&.

Core Team Member:


Profitability analysis

Pro-"#ab"l"#! anal!s"s co9aD enables !ou #o e5alua#e mar;e# segmen#s4 wh"ch can be class"-"ed accord"ng #o roduc#s4 cus#omers4 orders or an! comb"na#"on o- #hese4 or s#ra#eg"c bus"ness un"#s4 such as sales organ"?a#"ons or bus"ness areas4 w"#h resec# #o !our coman!s ro-"# or con#r"bu#"on marg"n. The a"m o- #he s!s#em "s #o ro5"de !our sales4 mar;e#"ng4 roduc# managemen# and corora#e lann"ng dear#men#s w"#h "n-orma#"on #o suor# "n#ernal accoun#"ng and dec"s"on9ma;"ng. Two -orms o- ro-"#ab"l"#! anal!s"s are suor#ed: cos#"ng9based and accoun#9based. •

Cos#"ng9based ro-"#ab"l"#! anal!s"s "s #he -orm o- ro-"#ab"l"#! anal!s"s #ha# grous cos#s and re5enues accord"ng #o 5alue -"elds and cos#"ng9based 5alua#"on aroaches4 bo#h o- wh"ch !ou can de-"ne !oursel-. *# guaran#ees !ou access a# all #"mes #o a comle#e4 shor#9#erm ro-"#ab"l"#! reor#.

•

Accoun#9based ro-"#ab"l"#! anal!s"s "s a -orm o- ro-"#ab"l"#! anal!s"s organ"?ed "n accoun#s and us"ng an accoun#9based 5alua#"on aroach. The d"s#"ngu"sh"ng charac#er"s#"c o- #h"s -orm "s "#s use o- cos# and re5enue elemen#s. *# ro5"des !ou w"#h a ro-"#ab"l"#! reor# #ha# "s  ermanen#l! reconc"led w"#h -"nanc"al accoun#"ng.

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


9e0uirements 6uture profitability business forecast4 )u#ure ro-"#ab"l"#! w"ll be -orecas#ed based on curren# orders on hand wh"ch are no# e7ecu#ed and #he e7ec#ed orders wh"ch are 6uo#a#"ons subm"##ed. )u#ure ro-"#ab"l"#! 1. Orders on hand  sales ordersD 2. +7ec#ed orders  6uo#a#"on D •

3ales orders "n hand ".e. 3ales orders 6#! -"n"shed goodsD 

7777

•

+7ec#ed orders 6uan#"#!  6#! #o be der"5ed -rom 6uo#a#"ons

•

To#al re6u"red raw ma#er"al  deend"ng on #he BOM4 need #o arr"5e #he Rm 6uan#"#! -or #he e7ecu#"on o- #o#al orders sales orders e7ec#ed ordersD

•

(eed #o cons"der #he resen# s#oc; o- raw9ma#er"als and sa-e#! s#oc; #o arr"5e #he raw ma#er"al #o be rocured.

•

Raw9ma#er"als re6u"red #o be rocured  #o#al raw ma#er"al re6u"red I raw ma#er"al s#oc; I sa-e#! s#oc;.

•

Raw ma#er"al r"ce  raw ma#er"als #o be rocured 7 curren# r"ceD

•

)"nance cos#  ,C or B or )%R charges.

•

Produc#"on cos# "nclud"ng #he o5erheadsD  arr"5ed -rom roduc# cos#"ng o- #he -"n"shed goods

•

M"scellaneous e7enses  user need #o en#er #he e7enses

•

To#al e7enses  roduc# cos#  -"nanc"al cos#  m"scellaneous e7enses

•

To#al re5enue sales 6#! 7 r"ce  6uo#a#"on 7 r"ce

•

Pro-"# loss  d"--erence be#ween #o#al e7enses and #o#al re5enues.

•

(o#e: co9c "s no# a caable #ool #o de5elo reor# o- abo5e re6u"remen#s

Profitability for the sales order )or each and e5er! e7ecu#ed sales order4 needs #o der"5e roduc#"on order. And also arr"5e #he ac#ual cos# o- #he roduc#"on order and "nclude #he ac;ag"ng cos#. ser has #o en#er

CO()*%+(T*A,

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Business Blueprint


T"#le: Con#roll"ng


#he sell"ng and d"s#r"bu#"on e7enses or needs #o de-aul# #he ercen#age. )"nanc"al cos# l";e ,C4 B cos# also #o be "ncluded. %"--erence be#ween #o#al cos# o- #he sales order and #he sales order 5alue de#erm"nes #he  ro-"#loss o- #he order. Aba de5elomen# re6u"remen#s

CO()*%+(T*A,

•

Produc# cos#"ng calcula#"on -or #ender 6uo#"ng  r"ce

•

Produc# cos#"ng -or arr"5"ng #he ro-"#ab"l"#! o- #he sales order

•

Pro-"#ab"l"#! anal!s"s -or #he sales order

•

)u#ure ro-"#ab"l"#! reor# "s re6u"red -or #he men#"oned er"od

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Business Blueprint


T"#le: Con#roll"ng

1'.

CO()*%+(T*A,

Core Team Member:


(aps •

Produc# cos#"ng calcula#"on -or #ender 6uo#"ng r"ce

•

Produc# cos#"ng -or arr"5"ng #he ro-"#ab"l"#! o- #he sales order

•

Pro-"#ab"l"#! anal!s"s -or #he sales order

•

)u#ure ro-"#ab"l"#! reor# "s re6u"red -or #he men#"oned er"od

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BBP CO_001_02

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