Cost Accounting for Resources (reporting) 4/4

Resource Cost Accounting has stay in many reports and analysis. These reports from Quantity Surveyor Section (in Bill of Material calculation), to Construction Management (actual costs per project) and Mechanization Management (detail costs of finer level of resources – each mechanization/vehicle resource).

The most of reports can make cost breakdown from total amount or amount per unit to amounts per cost types (depreciation, fuel, oil, maintenance…) for each capacity plan or usage in Job Ledger Entry or Resource Ledger Entry. System present complete breakdown cost structure, but present separately usage cost and standby cost also. We can see all deviations from G/L to calculated and applied entries.

Depends of options you choose, the most of these reports can give analysis with less or more details. Solution has many and many analysis, but I will recommend BI tools we have.

The best of these reports is that they can give you “smart” analysis and you can make right business decision, e.g. are you need to buy new resource or keep old one with maintenance. You can compare credit/leasing installment costs (with fuel/oil consumption for new machine) with maintenance costs (with increased fuel/oil consumption for old machine). Of course, you can use actual costs, not planned.

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Cost Accounting for Resources (setup) 2/4

Applying Calculated Cost automatic calculation process recalculate evaluated Resource Costs to actual Resource Cost. Actual costs are the really costs bookkeeper posted as payables costs on G/L accounts as in manufacturing (energy, fuel, oil, tires, maintenance, depreciations, payrolls…). These are really costs, not evaluated costs you put in Direct Unit Costs on Resource Card. Applying Calculated Cost automatic calculation is process based on posted costs in G/L entries in combination with different dimensions. We recommend to all mechanization resources of vehicles has own dimension. We will have all cost for each resource and all calculation will be exactly.

Before we start with describe process of calculation, we will first describe process of mapping G/L Account to Resources costs. Resource Cost mapping with G/L Account is performed in table Adjust Resource Cost. This table can be opened from new lookup fields Direct Unit Cost (only for direct costs) and Unit Cost (for direct and indirect costs) on Resource Card pages. These are costs which resulting by resource usage.

We need create Resource Cost Definition for the most important cost types. This Resource Cost Definitions will be mapped with G/L Accounts and dimension value combination. In G/L Account No. field we can put combination of GL Accounts (using standard NAV filters) and in dimension fields we can put combination of dimension values (also using standard NAV filters).

When we put Resource Cost Definition, we have to determine Entry Type (Direct Cost or Indirect Cost), Resource Code, Evaluated Cost Amount (we use this amount for posting before calculation), Unit Cost (calculated cost amount), G/L Account Filter (combination of G/L accounts from where we will get costs amount), Mechanization Dimension Filter (combination of Mch. dimension values from where we will get costs amount), Share of cost on G/L account %. When we configure all previous values, in Cost Posted to GL, system will show sum of values on GL Entries for configured filter combination. Also, in Resource Quantity field, system will be show sum of usage types in resource entries.

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When we start Applying Calculated Cost automatic calculation process, it is calculate different from actual and evaluated costs and register this different in Adj. Unit Cost. This values is not posted as in manufacturing process. We need to decide what we want to do with this results.

More details in some later posts…

Mechanization Management (briefly)

Besides mechanization engagement posting and monitoring at number of different parameters at the same time (work hours, mileage, transported or excavated quantity…) using NAV Job Journal and Resource Journal and Construction Output Order, it is possible to manage the complete mechanization life cycle with many parameters (types, details, usage, replacement…).

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We can monitor at the same time for each mechanization resource:

  • total of all resource hours per day
  • total of working hours
  • total of deadlock and hours and reasons
  • what machine working in these hours
  • what is unit of measure and how much machine worked
  • if this is vehicle, how many tours and what mileage

Based on these information, we can make amazing analysis.

Of course, we have completely fuel consumption evidence, regardless we use our fuel or we buy fuel on gas station. We use standard NAV Item Journal functionality and modify into Fuel Journal with additional evidence about moment fueling (mileage, work hour, computer and EDM state). Based on these information, we can make analysis about fuel consumption in different working conditions.

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Each mechanization resource is connected to the fixed assets evidence and other postings in the system (GL, purchase, sale, service…). We have common evidence for all types of services, regardless it is internal or external service. Standard NAV Service Management can do only external service, but we change that and now it can posting internal service with automatic posting on Fixed Assets or FA Maintenance evidence. All costs (external by Purchase Invoice, internal by Internal Service Order) will be automatically posting to the FA with all NAV standard functions.

Besides regular service evidence, we add completely new functionality – Preventive Service. We can post and monitoring all minor activity on each Mechanization Resource, e.g. oil change, oil filter change, battery engagement, tire monitoring by each piece and serial number (installation, replacement, mending, repairing,…) per mileage and working hours, all sets greasing… System can tell us e.g. when we have to change oil and oil filter, based on combination of mileage, dates and work hours information.

System has information about vehicle registration, all types of insurance, technical inspection, MOT and it can inform us when we have to do these.