Cost Accounting. Presenting the Navision Axapta Cost Accounting Solution. Cost Center Accounting Overview

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1 Cost Center Accounting Overview Expense distribution sheet (per cost center, a group of cost centers and the whole business) Five methods for allocations and distributions Reference list with basic figures for allocations and distributions Various models of business hierarchies Vertical collation into totals and grand totals Values without cost center for reconciliation of accounts between cost and bookkeeping Cost Purpose Accounting Overview Cost Purpose Accounting (for selected purposes, purpose groups or the entire business) Various report definitions Allocations from cost center to purpose, and from purpose to purpose Actual or planned cost rates Portraying purposes in hierarchies (purpose groups) Various models of hierarchies Virtual hierarchies parallel to existing structure Cost Accounting Presenting the Navision Axapta Cost Accounting Solution The Navision Axapta Cost Accounting solution is an excellent information tool for facilitating business decisions. The solution lets financial personnel make a range of comparisons using freely selectable periods. Reports can be easily generated for financialmodel simulations that include various hierarchies, allocations and distributions. A key capability provided by the Cost Accounting solution is the ability to hierarchically structure the finances of a company, based on subsidiaries, units, divisions, departments, and other types of business entities. What s more, hierarchies, allocations and distributions can be created in models and versions. This offers greater flexibility in reporting and financial visibility. The Navision Axapta Cost Accounting solution is divided into the following two modules: Cost center module enables control of indirect costs that cannot be directly attributed to a purpose. Cost center results in an Expense Distribution Sheet, including hourly cost rates. Cost purpose module enables direct control of costs that are attributed to specific purposes. In direct correspondence, the module receives all relevant data that is not directly booked against a cost unit from Cost Center Accounting in the form of hourly cost rates. 1

2 Because the Cost Accounting solution is fully integrated with the core finance and trade modules in Navision Axapta, companies can more rapidly reuse and leverage the cost- information in a Navision Axapta system. 2. Definition of the sum lines and grand total lines In order to obtain a line structure, with which the reports are printed out, it is possible to define sum lines with a free selection of grand total lines. You can define sum lines, containing account sums of accounts allowed for cost center. Then Setting Up the Cost Center Accounting module To set up the Cost Center Accounting module, the following steps are required. These steps describe you can define main sums and compressed sums. For a quick overview, the AXAPTA Cost Accounting Solution makes it possible to print reports in an abbreviated form, showing only the defined sums. how to configure a fully functionally Expense Distribution Sheet (EDS). Step 1 - Definition of the accounts from financial Step 2 - Definition of the sum lines and grand total lines Step 3 - Draw up an organigram (creation of a hierarchy plan) Step 4 - Definition of cost centers required for EDS Step 5 and 6 - Set up the allocations (cost centers) and distributions (cost types) Each of these six steps is described in the following sections. After completing these steps, the module is ready for use 3. Draw up an organigram (creation of a hierarchy) The creation of a hierarchy, showing which individual departments belong to which areas, is the basis for portraying the company in cost center areas, product areas or areas of responsibility. Using the alphanumeric arrangement of cost centers, the hierarchy can administrate up to 2.2 billion possibilities. Virtual hierarchies can be set up parallel to the existing company structure for monitoring those cost centers which are included in large projects and for special planning purposes. Different hierarchies can be created in models so that you can portray your business in various ways using 1. Definition of the accounts from financial It is possible to permit every Income Statement account used in Financial Accounting to be used for Cost Accounting. As a prerequisite for the use of the Cost Accounting different structures. Moreover, when these structures change, historical and virtual hierarchies can still be used. A graphic display and a report of the hierarchy structure for each hierarchy model enables you to control your settings easily. Solution, accounts in Financial Accounting should be organized in a way that an account does not contain both indirect and direct costs. 2

3 4. Definition of cost centers required for EDS All existing cost centers from Financial Accounting can be approved and used for Cost Accounting. You can see whether a cost center contains fixed or proportional costs and if it is to be allocated or not. If you do not require standard costing in the full sense, you can still enter your planned cost rates according Values without cost center In the evaluation for the entire company, a VWC list (Values Without Cost center) is printed out. This is for validation purposes. It shows all costs not booked against cost centers. This list cannot be influenced by the user. It is intended for security and checking whether all costs have been processed as desired. to proportional and fixed cost components, and the number of planned hours. Other quantity units are also permitted. These cost rates will be compared to the actual cost rates in the Expense Distribution Sheet and make the control of your cost centers easier. Copying of models In order to create a new hierarchy model, or allocation and distribution version, it is not necessary to set up the parameters from scratch. An existing model or version can be copied and edited. 5 and 6. Set up the allocations (cost centers) and distributions (cost types) Each cost center and cost account can be defined for allocation or distribution. This means that allocation is only permitted for selected cost centers. All allocations Comparison of periods In order to improve the control of cost development, it is possible to compare a free selection of time periods. and distributions are created in versions, increasing the variety of cost apportionment. The setting up of a reference list, containing all important figures and showing how these relate to the cost centers, enables the allocations and distributions to be set up rationally. There are five methods for setting up allocations and distributions: Fixed percent, Account, Account group, Standard unit and Single unit. Steps to set up Cost Purpose Accounting As described below, the steps for setting up the Cost Purpose Accounting is straightforward. These steps include: Step 1 - Definition of the accounts from financial Step 2 - Definition of reports and report lines for Cost Purpose Accounting Expense Distribution Sheet Once the aforementioned steps are completed, the EDS can be made for the whole company, a part of the company, or selected cost centers. For each report, a special cover sheet will be printed. It will Step 3 - Definition of special cost rates used for calculation Step 4 - Import and definition of purposes Step 5 - Definition of a reference list for cost objects Step 6 - Set up allocations from cost center to show the selected parameters such as allocation and distribution version. 3

4 purpose Step 7 - Set up allocations from purpose to purpose Step 8 - Set up purpose hierarchies Center Accounting. You can define lines that specify relationships between allocations from cost centers and cost objects and relationships between allocations from cost objects. After these eight steps for setting up primary functionality, the module is ready for use. 3. Definition of special cost rates used for calculation 1. Definition of the accounts from financial Simply by selecting an option, it is possible to permit It is possible to perform Cost Purpose Accounting with planned, actual or special rates. You can enter special cost rates within the Cost purpose module. every Income Statement account used in Financial Accounting to be used for Cost Purpose Accounting. This can be done after Income Statement accounts been imported into Cost Center Accounting. As a prerequisite for using Cost Accounting, it is necessary that the accounts in Financial do not 4. Import and definition of purposes All existing purposes from Financial Accounting can be approved and used for Cost Purpose Accounting. You can also define purposes for allocation to other purposes. contain both overhead costs and direct costs. These costs have to be booked on different accounts. 5. Definition of a reference list for cost objects All allocations are created in versions, increasing the 2. Definition of reports and report lines for Cost Purpose Accounting In order to obtain a line structure with which the reports are printed out, it is possible to define lines with the following line types: Total, Main sum, Calculation, Debit fixed costs, Debit variable variety of cost apportionment. By setting up of a reference list that contains all important figures and shows how these relate to the cost objects, allocations can be set up rationally. Because Cost Purpose Accounting is based on Cost Center Accounting, the same versions will be used and are related. manufacturing costs, Debit variable wage costs, Allocation cost center to purpose, Allocation purpose to purpose, and Quantity. This way, you can define sums of those accounts allowed for Cost Purpose Accounting and the main sums of defined sums. You can define calculation rows and use them also for calculation of main sums. 6. Set up allocations from cost center to purpose. Cost centers that are not defined for allocation within Cost Center Accounting (and are not operational cost centers) can be directly allocated to cost objects. This function, for example, can be used for allocation of sales and administration cost centers. When debiting variable and fixed costs to cost objects, the module will receive all relevant data from Cost 4

5 Selecting from various methods for setting up these allocations gives more flexibility for Cost Purpose Accounting. You can select from the following methods: Fixed percent, Quantity account, Standard unit, Single unit, and Purpose line. the hierarchy system can accommodate up to 2.2 billion possibilities. Because product hierarchies are created in versions, you can portray your products in various ways using different structures. Moreover when these structures change, historical and virtual hierarchies survive and 7. Set up allocations from purpose to purpose All existing purposes can be defined for allocation to other purposes. This way, you can make bookings in Financial Accounting with a virtual purpose. These can still be used. A graphic display and a master file report of the hierarchy structure for each hierarchy model enables you to control your settings easily. bookings will be then allocated to other purposes within Cost Purpose Accounting. The ability to select from various methods for setting up these allocations gives more flexibility for Cost Purpose Accounting. You can select from the following methods: Fixed percent, Quantity account, Standard unit, Single unit, and Purpose line. Copying of models and versions In order to create a new model or version (hierarchy or distribution and allocation), it is not necessary to start from the beginning and set up the parameters from scratch. An existing model can be copied and edited. This includes that ability to copy only the defined purpose groups or the whole structure. 8. Set up purpose hierarchies The creation of a hierarchy that shows which products belong to which purpose groups is the basis for Copyright 2001 Navision a/s (NavisionDamgaard a/s), CBR No The trademarks referenced herein and marked with either TM or belong to Navision a/s (NavisionDamgaard a/s) or Navision Development a/s. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. No part of this document may be reproduced or transmitted in any form or by any means, whole or in part, without the prior written permission of Navision a/s. Information in this document is based on Navision Axapta version 2.5 and subject to change without notice. All rights reserved. portraying the cost objects in product hierarchies. Due to the alphanumeric arrangement of the cost objects, Address: 5

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