Work with the Cost accounting Get started wizard
Cost accounting in Finance provides important insights into the cost efficiency and capacity of the managerial decision-making processes. It empowers cost controllers and cost center managers to control, classify, allocate, and analyze costs of current operations and plan for future changes.
With the flexible data integration framework that's built into cost accounting, you can collect data across a wide range of data sources. Workspaces, along with a seamless integration with Microsoft Excel and the Cost accounting analysis content pack for Microsoft Power BI, provide powerful management reporting and critical business data at all organizational levels.
You can import data, such as general ledger entries and budget entries, into Cost accounting through data connectors. You can use preconfigured connectors or custom connectors to import data.
By using the Cost accounting Get started wizard in Cost accounting > Setup > Get started, you can select the legal entity from which you want to import data into cost accounting. Only one legal entity can be handled at a time. You can run this wizard again for a different legal entity.
If you open the Cost Accounting Ledger Administration workspace before setting up Cost accounting, the following page will display, where you can access the wizard.
The first screen describes cost accounting processes within Finance.
Select the Next button to begin the setup. Select a legal entity from the dropdown list and then select Next.
You can create cost accounting for a specific legal entity from any other company in your organization, assuming that you've been granted adequate security roles.
A cost element corresponds to a cost-relevant item in the chart of accounts. Basically, it can be any type of element at the lowest level in a business for estimating, controlling, and reporting costs. Cost elements range from ledger accounts to all cost-relevant resources. Cost accounting in Finance supports ledger accounts.
Based on the selected legal entity, the chart of accounts is selected for you. By default, main accounts of type Profit and loss, Expense, and Revenue will be converted to cost elements. You can update these selections, if needed. If you want to add more account types, select New.
A cost accounting ledger is defined by its attributes:
- Fiscal calendar
- Accounting currency
- Cost element dimension
- Statistical element dimension
- Policies
The cost accounting ledger is a summary of all transactions that are measured in terms of a monetary amount or magnitude, depending on the element type, such as cost element or statistical element.
All entries (cost entries or statistical entries) are accounted for by means of journals, which list all transactions by date. Managerial statements are generated based on summary totals in the cost accounting ledger.
You can select the fiscal calendar, exchange rate type, and accounting currency to be different from those values that have been defaulted from the selected legal entity. Data from individual legal entities will use the specified currency and exchange rate type to convert from the legal entity currency to the selection.
Select the financial dimensions that you want to analyze in the cost accounting ledger. You should select only account structure elements that are used by the ledgers of the legal entities that you're importing.
A cost object can be any type of object that you want to estimate, allocate cost to, or measure directly. Typical cost objects include products, projects, resources, departments, cost centers, and geographical regions. You can select the financial dimension for the members on which you want to perform cost control.
You can only select one dimension by using the wizard. You'll need to create others outside the wizard.
If you haven't set up budget data correctly, or budget data isn't important to you, you can set the value of the Create budget data connector option to No. You can add data connectors to import budget data anytime.
If you choose to include the budget, leave the Create budget data connector option set to Yes and then select New to select your budget models. You can include Expense or Revenue data and then select a budget type. You can also specify the original and revised budgets for analysis. The system will only import posted budget data. For each budget model, you need to select Budget type and Budget entry type.
You can add one budget model multiple times, provided that the values of Budget type and Budget entry type are different.
Select Finish to allow the system to process your request and create objects. The system will notify you when the batch job is complete, and it will display a Congratulations message.
By completing the Cost accounting Get started wizard, you can create managerial reports through the built-in Cost control workspace, export data to Excel or Power BI, and define policies for Cost behavior classification, Cost distribution, and Cost allocation.