Deltek Insight 2011: Fun with Rates: Setting Up Complex Indirect Rate Structures in Costpoint
Transcript of Deltek Insight 2011: Fun with Rates: Setting Up Complex Indirect Rate Structures in Costpoint
CP-306 Fun with Rates: Setting Up Complex Indirect Rate Structures in CostpointPresented bySusan Zimmermann, ZooM Consulting LLC
Gary Brenning, Deltek
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Project Manufacturing
Human Resources
Project Management
Financial Management
Enabling Success
Winning More Business
Reducing the Cost of Compliance
Increasing Project Visibility
Improving Cash Flow
CRM and Capture Management
Teaming Solutions
Market Intelligence
Business Performance Management
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Project Manufacturing
Human Resources
Financial Management
Project Management
Do More
©2011 Deltek, Inc. All Rights Reserved
CRM and Capture Management
Teaming Solutions
Market IntelligenceWin More
Do More
Project Execution & Management
Reporting, GRC & Compliance
Project & Corp Accounting
Time, Expense, Labor, Payroll
Business Performance Management
Know More
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Agenda Causes of a Complex Structure Costpoint Tools Defined Concepts and Examples Costpoint Setup Discussion Key Take Aways Conclusion
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Key Takeaways Costpoint has the flexibility to allocate costs in a variety of different ways
to fit your business needs. Understand how other supporting elements aid in driving costs to
accounts and organizations. Other ways to structure your accounts and organizations to fit your
organizations needs. Use all the functionality that’s available in the system.
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Causes of a Complex Structure Acquisitions Divestitures Internal Growth and Diversity Flexibility in Costing Actions of a Competitor New Customers New Requirements from Current Customers
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Causes of a Complex Structure Multiple entities in database with multiple disclosure statements meaning
same costs may be treated differently depending on disclosed practices of group.
Merging of companies into single database with varying Costpoint architectures requiring need for flexibility.
Decentralized back office accounting functions. Outsourced functions such as payroll. Internal reporting requirements. Lack of understanding.
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Costpoint Indirect Rate Tools Defined Indirect Rate Tools
Cost Pool Service Centers Multi-jobs
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Costpoint Indirect Rate Tools Defined
COST POOLS A cost pool is an automated calculation of indirect costs allocated over
base costs The base of calculation must be dollars or hours Cost and base are derived from account/organization combinations Allocation accounts must be non-project required
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Costpoint Indirect Rate Tools Defined
SERVICE CENTERS A service center is an automated calculation of indirect cost allocated
over base costs that are derived automatically or manually The base of calculation can be either dollars or hours, but usually
consist of units Cost is derived from account/organization combinations, base is either
automated from hours or dollars or manual from units input Allocation accounts can be project required or non-project required
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Costpoint Indirect Rate Tools Defined
MULTI-JOB ALLOCATIONS A multi-job is an automated allocation of indirect or direct project cost
allocated over base costs The base of calculation can be either dollars, hours, or a percentage Cost and base is derived from project/account/organization
combinations Allocation accounts must be project required
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Concepts and Examples The key to your rate structure is how do you drive a cost to an
account and organization? Projects Vendor Defaults Labor Defaults Labor Groups Leave Types PAGs
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Concepts and Examples Fringe Organizations
Concept where fringe costs are coded to one organization number that corresponds to a single fringe pool versus coding to the home org of the employee.
Use when performing payroll and leave calculation external to Costpoint database.
Pro’s Allows for easier coding of costs from external sources More simplistic wildcarding for pools
Con’s Lose ability to run income statement by originating employee organization
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Concepts and Examples Using Multi-Job Allocations for Service Centers Collects cost of a service center using single project and distributes as a direct
project cost. Used when desire is to have service center costs charged directly back to a
project as a line item. Pros
Allows flexibility of costing Cons
Disjointed rate calculation process
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Concepts and Examples Driving Pools – By Account with Flat Org Structure Separate set of accounts for flavors of overhead (ie Onsite versus offsite) No inherent logic in organization delineating pool Pros
Easier identification on Project status report Flat organization structure allows for easier reorganizations (ie don’t have to
change owning orgs on projects and employees if developing new structure) Cons
Wildcarding organizations for pools more difficult Increases size of Chart of accounts
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Concepts and Examples Driving Pools – By Organization and Account Separate set of accounts for flavors of overhead (ie Onsite versus offsite) Inherent logic in organization delineating pool Pros
Ability to wild card pools Maintains small chart of accounts
Cons If changing organization structure could lead to significant org changes on
projects and account/org linkings at FY change. Requires printing project reports by organization if needing to see delineations
of labor by pool.
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Concepts and Examples Touch Charging with Residual Pool
Employees charge different projects based on what they are working on. Charges such as general training that can’t be identified to a specific objective
are charged to a residual pool and allocated over a basis. Used when functions such as contracts will charge direct Pros
Allows company to charge typical indirect function as direct. Allows the flexibility needed to comply with disclosed practices
Cons Requires significant training of employees to ensure they understand what is
charged to residual pool. Periodic review of charges to residual suggested to mitigate risk of improper
charging.
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Cost Pool Setup Cost Pool is determined by the Service Center box being unchecked Required fields
Default Credit Account Group Fiscal Year Pool Number Sequence Number Pool Type Name Short Name Basis Description
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Service Center Setup Service Center is determined by checking the service center box Required fields
Default Credit Account Group Fiscal Year Pool Number Sequence Number Pool Type Name Short Name Basis Description
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Service Center Subtask If Basis is Hours or Dollars,
Calculation of Base can be either Automatic or Manual
If Basis is Units, Calculation of Base must be Manual
Can apply allocation at a standard rate
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Cost Creation Setup Set up wildcards to build pool cost for cost pool and service center
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Base Creation Setup Set up wildcards to build pool base for cost pool and automated service center
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Multi-job Setup Multi-jobs can be based on costs, hours, or a percentage Required fileds include –
Project Allocation Code Project to Allocate Allocation Method Allocation Basis Credit Infomation Rate Type
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Cost Accounts Subtask Accounts can be listed in a range, but no wildcarding
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Cost/Hours Base Subtask Projects, Accounts, and Organizations can be listed in a range, but no
wildcarding Must have a Debit Account and Organization
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Percentage Base Subtask Projects are listed individually with the Debit Account and Organization that the
allocation should go to Total Percentage must equal to 100%
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Conclusion Costpoint has the flexibility to allocate costs in a variety of different ways to fit
your business needs. Understand how other supporting elements aid in driving costs to accounts and
organizations. Other ways to structure your accounts and organizations to fit your organizations
needs. Use all the functionality that’s available in the system.
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Questions?
www.twitter.com/deltek
www.facebook.com/deltekinc
www.linkedin.com/company/163414
www.youtube.com/user/deltekinc
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For additional questions regarding this presentation we can be reached at
Susan Zimmermann – [email protected]
Gary Brenning – [email protected]