Cost Accounting
Cost Center Accounting Overview
• Expense distribution sheet (per cost center, a
Presenting the Navision Axapta Cost
group of cost centers and the whole
Accounting Solution
business)
The Navision Axapta Cost Accounting solution is an
• Five methods for allocations and distributions
excellent information tool for facilitating business
• Reference list with basic figures for
decisions. The solution lets financial personnel make
allocations and distributions
a range of comparisons using freely selectable
• Various models of business hierarchies
periods. Reports can be easily generated for financial-
• Vertical collation into totals and grand totals
model simulations that include various hierarchies,
• Values without cost center for reconciliation
allocations and distributions.
of accounts between cost accounting and
A key capability provided by the Cost Accounting
bookkeeping
solution is the ability to hierarchically structure the
Cost Purpose Accounting Overview
finances of a company, based on subsidiaries, units,
• Cost Purpose Accounting (for selected
divisions, departments, and other types of business
purposes, purpose groups or the entire
entities. What’s more, hierarchies, allocations and
business)
distributions can be created in models and versions.
• Various report definitions
This offers greater flexibility in reporting and financial
• Allocations from cost center to purpose, and
visibility.
from purpose to purpose
The Navision Axapta Cost Accounting solution is
• Actual or planned cost rates
divided into the following two modules:
• Portraying purposes in hierarchies (purpose
Cost center accounting module — enables control
groups)
of indirect costs that cannot be directly attributed to a
• Various models of hierarchies
purpose. Cost center accounting results in an
• Virtual hierarchies parallel to existing
Expense Distribution Sheet, including hourly cost
structure
rates.
Cost purpose accounting 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.
Fact sheet, June 2001, V.2.5
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Because the Cost Accounting solution is fully
2. Definition of the sum lines and grand total lines
integrated with the core finance and trade modules in
In order to obtain a line structure, with which the
Navision Axapta, companies can more rapidly reuse
reports are printed out, it is possible to define sum
and leverage the cost-accounting information in a
lines with a free selection of grand total lines. You can
Navision Axapta system.
define sum lines, containing account sums of
accounts allowed for cost center accounting. Then
Setting Up the Cost Center Accounting
you can define main sums and compressed sums. For
module
a quick overview, the AXAPTA Cost Accounting
To set up the Cost Center Accounting module, the
Solution makes it possible to print reports in an
following steps are required. These steps describe
abbreviated form, showing only the defined sums.
how
to
configure
a
fully functionally
Expense
Distribution Sheet (EDS).
3. Draw up an organigram (creation of a hierarchy)
Step 1 - Definition of the accounts from financial
The creation of a hierarchy, showing which individual
accounting
departments belong to which areas, is the basis for
Step 2 - Definition of the sum lines and grand total
portraying the company in cost center areas, product
lines
areas
Step 3 - Draw up an organigram (creation of a
alphanumeric arrangement of cost centers, the
hierarchy plan)
hierarchy
Step 4 - Definition of cost centers required for EDS
possibilities.
Step 5 and 6 - Set up the allocations (cost centers)
“Virtual hierarchies” can be set up parallel to the
and distributions (cost types)
existing company structure for monitoring those cost
Each of these six steps is described in the following
centers which are included in large projects and for
sections. After completing these steps, the module is
special planning purposes.
ready for use
Different hierarchies can be created in models so that
or
areas
can
of
responsibility.
administrate
up
to
Using
2.2
the
billion
you can portray your business in various ways using
1. Definition of the accounts from financial
different structures. Moreover, when these structures
accounting
change, historical and virtual hierarchies can still be
It is possible to permit every Income Statement
used.
account used in Financial Accounting to be used for
A graphic display and a report of the hierarchy
Cost Accounting.
structure for each hierarchy model enables you to
As a prerequisite for the use of the Cost Accounting
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.
Fact sheet, June 2001, V.2.5
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4. Definition of cost centers required for EDS
Values without cost center
All existing cost centers from Financial Accounting
In the evaluation for the entire company, a VWC list
can be approved and used for Cost Accounting.
(Values Without Cost center) is printed out. This is for
You can see whether a cost center contains fixed or
validation purposes. It shows all costs not booked
proportional costs and if it is to be allocated or not. If
against cost centers. This list cannot be influenced by
you do not require standard costing in the full sense,
the user. It is intended for security and checking
you can still enter your planned cost rates according
whether all costs have been processed as desired.
to proportional and fixed cost components, and the
number of planned hours. Other quantity units are
Copying of models
also permitted. These cost rates will be compared to
In order to create a new hierarchy model, or allocation
the actual cost rates in the Expense Distribution Sheet
and distribution version, it is not necessary to set up
and make the control of your cost centers easier.
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)
Comparison of periods
Each cost center and cost account can be defined for
In order to improve the control of cost development, it
allocation or distribution. This means that allocation is
is possible to compare a free selection of time
only permitted for selected cost centers. All allocations
periods.
and distributions are created in versions, increasing
the variety of cost apportionment. The setting up of a
Steps to set up Cost Purpose Accounting
reference list, containing all important figures and
As described below, the steps for setting up the Cost
showing how these relate to the cost centers, enables
Purpose Accounting is straightforward. These steps
the allocations and distributions to be set up rationally.
include:
There are five methods for setting up allocations and
Step 1 - Definition of the accounts from financial
distributions: Fixed percent, Account, Account group,
accounting
Standard unit and Single unit.
Step 2 - Definition of reports and report lines for Cost
Purpose Accounting
Expense Distribution Sheet
Step 3 - Definition of special cost rates used for
Once the aforementioned steps are completed, the
calculation
EDS can be made for the whole company, a part of
Step 4 - Import and definition of purposes
the company, or selected cost centers. For each
Step 5 - Definition of a reference list for cost objects
report, a special cover sheet will be printed. It will
Step 6 - Set up allocations from cost center to
show the selected parameters such as allocation and
distribution version.
Fact sheet, June 2001, V.2.5
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purpose
Center Accounting. You can define lines that specify
Step 7 - Set up allocations from purpose to purpose
relationships between allocations from cost centers
Step 8 - Set up purpose hierarchies
and
cost
objects
and
relationships
between
allocations from cost objects.
After these eight steps for setting up primary
3. Definition of special cost rates used for
functionality, the module is ready for use.
calculation
1. Definition of the accounts from financial
It is possible to perform Cost Purpose Accounting with
accounting
planned, actual or special rates. You can enter special
Simply by selecting an option, it is possible to permit
cost rates within the Cost purpose module.
every Income Statement account used in Financial
Accounting to be used for Cost Purpose Accounting.
4. Import and definition of purposes
This can be done after Income Statement accounts
All existing purposes from Financial Accounting can
been imported into Cost Center Accounting. As a
be approved and used for Cost Purpose Accounting.
prerequisite for using Cost Accounting, it is necessary
You can also define purposes for allocation to other
that the accounts in Financial accounting do not
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
variety of cost apportionment. By setting up of a
Purpose Accounting
reference list that contains all important figures and
In order to obtain a line structure with which the
shows how these relate to the cost objects, allocations
reports are printed out, it is possible to define lines
can be set up rationally. Because Cost Purpose
with the following line types: Total, Main sum,
Accounting is based on Cost Center Accounting, the
Calculation,
same versions will be used and are related.
Debit
fixed
costs,
Debit
variable
manufacturing costs, Debit variable wage costs,
Allocation cost center to purpose, Allocation purpose
6. Set up allocations from cost center to purpose.
to purpose, and Quantity.
Cost centers that are not defined for allocation within
This way, you can define sums of those accounts
Cost Center Accounting (and are not operational cost
allowed for Cost Purpose Accounting and the main
centers) can be directly allocated to cost objects.
sums of defined sums. You can define calculation
This function, for example, can be used for allocation
rows and use them also for calculation of main sums.
of sales and administration cost centers.
When debiting variable and fixed costs to cost objects,
the module will receive all relevant data from Cost
Fact sheet, June 2001, V.2.5
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Selecting from various methods for setting up these
the hierarchy system can accommodate up to 2.2
allocations gives more flexibility for Cost Purpose
billion possibilities.
Accounting. You can select from the following
Because product hierarchies are created in versions,
methods: Fixed percent, Quantity account, Standard
you can portray your products in various ways using
unit, Single unit, and Purpose line.
different structures. Moreover when these structures
change, historical and virtual hierarchies survive and
7. Set up allocations from purpose to purpose
can still be used.
All existing purposes can be defined for allocation to
A graphic display and a master file report of the
other purposes. This way, you can make bookings in
hierarchy structure for each hierarchy model enables
Financial Accounting with a virtual purpose. These
you to control your settings easily.
bookings will be then allocated to other purposes
within Cost Purpose Accounting.
Copying of models and versions
The ability to select from various methods for setting
In order to create a new model or version (hierarchy
up these allocations gives more flexibility for Cost
or distribution and allocation), it is not necessary to
Purpose Accounting. You can select from the
start from the beginning and set up the parameters
following methods: Fixed percent, Quantity account,
from scratch. An existing model can be copied and
Standard unit, Single unit, and Purpose line.
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. 76 24 72 18. The trademarks referenced
TM
or ® belong to Navision a/s (NavisionDamgaard a/s) or Navision
herein and marked with either
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:
www.navision.com
Fact sheet, June 2001, V.2.5
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