CO - Managerial Accounting

 

Managerial accounting applications record financial transactions and create an information base for comprehensive cost and revenue controlling.

Controlling tools are designed in a way so that they contribute to decision-making improvement, enable to measure efficiency and identify areas where cost reduction is feasible. Due to full integration with other functions of mySAP Financials solution these tools enable to analyze key factors affecting costs and revenues and speed up the response to changes and exceptional (unplanned) circumstances in real time.

Managerial accounting applications operate independently of finance accounting applications on the basis of continuous data exchange. In controlling cost and revenues are allocated by the user to defined controlling objects such as cost centres, processes, projects, customer orders, or production orders. The applications comprise a full range of allocation methods utilizing specialized functions for particular types of controlling objects. Thanks to full integration with logistical and business applications the user is enabled to allocate both physically, and value-recorded transaction, and subsequently after accomplishing allocation, a contingent transaction valuation can be processed. Not only valuation in conformity with legislation requirements is supported, but also valuation provided on the basis of user-defined rules which are intended for in-house use.

As a part of managerial accounting, cost calculation of services (and goods) enable multilevel calculation of actual costs. The applications involve simulation functions; results of simulation processes may be stored and used in subsequent analyses. These records can be utilized even when efficiency budgeting is prospectively introduced.

Functions for investment management are designed for integrated management and registering of all activities connected with investment measures – from investment planning and budgeting to active control of investment budget utilization and financial settlement – including promotion of pre-investment analysis and depreciation simulation.

Cost and revenue accounting functions have the following features:

·        Bookkeeping of cost centres and internal orders;

·        Project bookkeeping;

·        Investment management;

·        Cost calculation of activities;

·        Cost and revenue planning.

Cost Centres

Cost centres constitute base units of cost operations. Cost centres are incorporated into the general organizational structure of the company, and they are merged into superior decision-making units, control units and units of responsibility. At cost centres Indirect costs are filed and further settled by means of internal balancing techniques. Basically, costs are centralized at cost centres – we can pursue them divided according to the areas of responsibility, technical aspects of space and clearing.

Cost centre planning must be regarded as a part of the overall organization planning process where it is naturally incorporated. Flexible scheming of planned quantities (performance and expenditure) and thereafter derived values are also carried out within cost centre planning procedures. Cost centre planning is executed for clearly defined periods (it is mostly carried out on annual basis, but it can be planned quarterly or otherwise as well).

Internal Orders

Generally, internal orders serve for planning, collecting and settlement of costs of internal measures and tasks. The system enables to control internal orders throughout their validity period - from initiation, planning and charging of all actual costs to final clearing. Orders can be allocated to any operation area of the company. There operation-economical processes can be traced and administered; the processes concerning a particular order may be executed at every stage of its validity period.

By means of integrated planning functions operation costs can be either guessestimated before the order is processed, or calculated accurately at a later time. Order clearing passes on costs aggregated to the order to relevant recipients. All planned and available costs can be controlled through statistical returns system at any stage of order processing.

Internal orders may be utilized for different purposes. This functional zoning is displayed in different kinds of orders whose features determine the order processing in the system.

Final costs of a particular action can be guessestimated or accurately calculated through order planning, moreover – presumable costs of different processing methods can be compared.

In addition, planning also provides a base for subsequent comparison and enables an early diagnosis of significant variances between planned and actual costs so that possible problems and weaknesses are tackled.