Cost Accounting

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SAP Business One 8.81 Expert Empowerment Session SAP Business One 8.81 Business Logic 3 Addition Cost Accounting Reconciliation Report Dipan Shah Roll-Out Services, Small Business GTM Sales SAP (UK) Ltd December 2010

Transcript of Cost Accounting

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SAP Business One 8.81Expert Empowerment Session

SAP Business One 8.81Business Logic 3 AdditionCost Accounting Reconciliation Report

Dipan ShahRoll-Out Services, Small Business GTM SalesSAP (UK) Ltd

December 2010

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In this session you will learn about the Cost Accounting Reconciliation Report that forms part of the enhancements in the business logic of SAP Business One 8.81 compared to SAP Business One 8.8.

Objectives

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Agenda

1.Overview

2.Legal vs. Management view

3.Example Business Scenario

4.Detailed Analysis of Cost Accounting Reconciliation Report

5.Upgrading from prior versions

6.Demo

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Basic Cost Accounting1.1) Overview

Enhancements:

Introduced Multi-dimensions concept

Assign up to 5 dimensions

General Setting

View multi-dimensions in a single column

or individual columns

Block posting where distribution rule or

project code is missing

G/L Accounts master data extension

checkbox

Enter default value or use above

assignment

Benefits:

Multidimensional assignment

Enforces completion of data

Greater cost and revenue analysis

Motivation: Enable Cost and Revenue Analysis

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Basic Cost Accounting 1.2) Overview

Enhancements:

Cost center and Distribution rule master

data extension

Assignment to Dimensions

Active setting to speed up selection

Transactions attached to multiple Cost

centers via Dimensions

Data presented in different views using

Dimensions

Benefits:

Speed up entry of data

Better grouping of cost centers

Multiple views can be generated of the

same data

Motivation: Data capture in a single location

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Basic Cost Accounting 1.3) Overview

Enhancements:

Cost Accounting Summary report

Include Journal vouchers

Use of hierarchies for desired report

structure

Budget versus Cost Center report

Reporting per dimension

Cost Accounting Reconciliation report

Cost accounting correction JE

transparent

All new reports are presented in Crystal

Report layouts

Benefits:

Managers see their own data

Supports management decisions

Budget management

Motivation: Management Decisions Backed up by Real Data

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Legal vs. Management view

Considering the different accounting points of view of financial accounting and cost accounting, the purpose of this report is to provide a means of reconciling financial accounting and cost accounting figures.

Selection Criteria

Dimension (single selection)

G/L Account (Multi selection) Only P/L Accounts (Account type = “Sales” or “Expenditure”) can be selected.

Date Type (Posting date/Document Date/ Due Date)

Date range (From...To)

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Example Business ScenarioGeneral Description

For user to ensure that expenses and revenue are posted to the correct period, accrual objects are defined to reflect the difference between financial accounting and cost accounting.

Use case of difference existing between financial accounting and cost accounting: Use Case I: Get an invoice for 240USD for insurance midway through the year. This

reflects a full year’s insurance which needs to be reflected over 12 months of which some fall in the next financial year.

Note: For ease of explanation there are no tax implications in this example. User defines an accrual object for insurance and then records the cost accounting insurance expense amounts by using 2 additional GL accounts. The posting difference is displayed in the Cost Accounting Reconciliation Report.

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Example Business ScenarioPosting process

Example

Insurance invoice comes midway through the year for 12 months

Payment to be made immediately

For Cost Accounting we need to ensure the cost of the insurance is divided over the 12 months of cover

240 (1a)

Current Posting

Supplier

240

20

(1a)

Additional Postings needed

Insurance Calculated

(2) (2)

Insurance Exp

Interim insurance account

20 (3)20 (4)20 (5)20 (6)

(3)(4)(5)(6)

20202020

20

(1b) 240

Postings1a – Invoice for insurance1b – Payment of insurance2-6 – Monthly cost divided over 12 months

For 2-6 we need to define an accrual object and new GL accounts to associate with the insurance expense account

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Example Business ScenarioSteps (1/4)

Step 1: Define Additional G/L Account

Step 2: Define Accrual Objects and maintain account assignment

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Example Business ScenarioSteps (2/4)

Step 3: Create Recurring Postings

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Example Business ScenarioSteps (3/4)

Step 4: Post recurring postings – Monthly based

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Example Business ScenarioSteps (4/4)

Step 5: View Cost Accounting Reconciliation Report

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Detailed analysis of the Cost Accounting Reconciliation Report (1/4)

Financial Accounting All selected P/L accounts are listed with total

posted amounts from all JE postings in the selected period

For G/L accounts with type “Sales”, the amount displayed is calculated as sum(Credit – Debit) of all postings in the selected date range under the column Revenue

For G/L accounts with type = “Expenditure”, the amount displayed is calculated as sum(Debit – Credit ) of all postings in the selected date range under the column Expense

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Detailed analysis of the Cost Accounting Reconciliation Report (2/4)

Cost Accounting Company Related

o Consider in the selected dimension;o JE postings without DR assignment are

included into this part. o Accounts that have no related Accrual

objects are included here.

o For G/L accounts with type “Sales”, the amount displayed is calculated as sum(Credit – Debit) of all postings in the selected date range under the column Revenue

o For G/L accounts with type = “Expenditure”, the amount displayed is calculated as sum(Debit – Credit ) of all postings in the selected date range under the column Expense

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Cost Accounting Cost Accounting Correction

o CA correction mostly used for Accruals and Deferrals

o Consider in the selected dimensiono Two kinds of accounts are included in this

part: Accounts set as “Posting Acct.” in

Accrual Object Setup Accounts set as “Interim Calculated

Acct.” in Accrual Object Setup

o Display sum(Credit– Debit) of the JE posting of “Posting Acct.” as “Revenue”, if account type is “Sales”

o Display sum(Debit – Credit) of the JE posting of “Posting Acct.” as “Expense”, if account type is “Expenditure”

o Display sum(Credit– Debit) of the JE posting of “Interim Calculated Acct.” as “Revenue”, if account type is “Sales”

o Display sum(Debit – Credit) of the JE posting of “Interim Calculated Acct.” as “Expense”, if account type is “Expenditure”

Detailed analysis of the Cost Accounting Reconciliation Report (3/4)

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Detailed analysis of the Cost Accounting Reconciliation Report (4/4)

Cost Accounting Cost Accounting P/L

o Consider in the selected dimensiono JE postings with DR assignment are included in

this parto Two kinds of accounts are included in this part:

Accounts set as “Calculated Acct.” in Accrual Object Setup

Accounts that have no relationship with Accrual objects

o Display sum(Credit– Debit) of the JE posting of “Calculated Acct.” as “Revenue”, if account type is “Sales”

o Display sum(Debit – Credit) of the JE posting of “Calculated Acct.” as “Expense”, if account type is “Expenditure”

o Display sum(Credit– Debit) of the JE posting of other accounts (not related to Accrual objects) as “Revenue”, if account type is “Sales”

o Display sum(Debit – Credit) of the JE posting of other accounts (not related to Accrual objects) as “Expense”, if account type is “Expenditure”

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Upgrading from prior versions

Where a customer using the cost accounting functionality prior to the 8.81 version wants to upgrade, the following issues need to be considered:

1.You can upgrade and decide not to use Dimensions -> in this case you carry on working as normal

2.You can upgrade and start using Dimensions:a- you first need to switch on this functionality in Administration – System Initialization

– General Settings – Cost Accounting tabb- you have to define dimensions (up to 5)c- the first Dimension in the list is automatically applied to the existing cost centers

d- this assignment cannot be changed if the cost center has been used in any transactions

NOTE: Customers use the cost accounting functionality in various ways. Depending on the usage, you must carefully analyze the requirements and decide on how best to use the new functionality.

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Demo

Demo

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Example Business ScenarioGeneral Description

For user to ensure that expenses and revenue are posted to the correct period, accrual objects are defined to reflect the difference between financial accounting and cost accounting.

Use case of difference existing between financial accounting and cost accounting: Use Case I: Get an invoice for 240USD for insurance midway through the year. This

reflects a full year’s insurance which needs to be reflected over 12 months of which some fall in the next financial year.

Note: For ease of explanation there are no tax implications in this example. User defines an accrual object for insurance and then records the cost accounting insurance expense amounts by using 2 additional GL accounts. The posting difference is displayed in the Cost Accounting Reconciliation Report.

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Thank you!

Dipan ShahRoll-Out Services, Small Business GTM SalesSAP (UK) Ltd

December 2010

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