People Soft Cost Management Data Sheet

ORACLE DATA SHEET

PEOPLESOFT COST MANAGEMENT PeopleSoft Cost Management provides the control and flexibility you need to manage costs throughout your supply chain. With powerful features that support multiple methods of costing, comprehensive analysis, flexible overhead allocation, and accurate accounting and reporting, our cost management system enables you to

Support multiple

model your business exactly as you require it.

costing methods.

PeopleSoft Cost Management supports a variety of inventory costing methods that enable you to effectively track costs in production as well as in your finished goods

Perform accurate accounting and

supply chain. It also enables you to easily perform revaluations, analyze manufacturing performance, and perform cost simulations.

comprehensive

Event-Driven Solutions

analysis.

PeopleSoft Workflow messages can communicate changes affecting item or production costs and potential production variances. Use it to:

Control your

•

financial, governmental, and

(BOM) or routing changes. •

management reporting.

Inform the selected role—using a workflow message—of any bill of material

Advise the appropriate person—such as the cost accountant—when scrap is recorded, or of potential production variances.

Use PeopleSoft Navigator to create maps that show your team the activities and steps they need to take to perform their jobs. Present a process-oriented view of PeopleSoft application pages. Simplified Cost Foundation Setup With easy cost foundation setup, you can define unlimited cost types including standard, weighted average, forecasted, current, activity-based and more. You can: •

Select the purchase price option that’s best for you—to facilitate simulations and what-if analysis.

•

Set up cost versions to maintain a history of the different costs calculated for each cost type.

•

Automatically determine labor and machine costs with conversion codes and conversion overhead codes linked to work centers, jobs, and routings.

•

Choose labor or machine costs or rates expressed as a rate “per hour” or “per unit.”

•

Select rate types for conversion costing overhead—percentage of labor, per labor hour, percentage of machine, and per machine hour. Or select a rate type of “per unit” to allocate activity-driven overhead.

Item Costing Cost Management provides full item costing functionality. Use it to:

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ORACLE DATA SHEET

•

Add costs in addition to material, labor, machine, and conversion.

•

Calculate additional costs based on percentage of material costs, percentage of total costs, or amount per unit.

•

Establish transfer prices or mark-up percentages for items transferred at different costs to other business units.

•

Copy basic cost structures across your enterprise.

•

Copy costs and rates between business units.

Landed Costs To track the complete cost of an item, you can include the landed cost charges in the item’s cost. Landed cost charges can include expenses such as freight, insurance, duty, and handling. You can: •

Specify the calculation and allocation method for each charge when you define landed cost charges for items.

•

Create cost templates that specify which cost charges to attach to any combination of item, item category, vendor, vendor location, ship-to ID, and purchasing business unit.

•

Directly associate, in PeopleSoft Purchasing, cost templates and individual charges with a purchase order header or purchase order schedule.

Based on the charges associated with a purchase order, the system creates estimated costs for purchase orders and receipts. When you receive and put away a weighted average or an actual costed item, the system values the transaction based on the total landed cost. For standard costed items, the system continues to use the item’s standard cost. Support of Multiple Costing Methods To support the need for financial, governmental, and management reporting, you can maintain multiple cost books within a PeopleSoft Inventory business unit in those environments where you buy and sell inventory with no manufacturing. For items in each cost book, you define a profile, consisting of a receipt cost method, a cost flow, and a deplete cost method, to value inventory transactions involving those items. The costing approach you choose can be independent of how the inventory is physically moved. For example, you can use a first in, first out (FIFO) picking method for inventory shipments but cost the transactions using any costing method. PeopleSoft Cost Management supports:

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•

Non-cost.

•

Standard.

•

FIFO actual.

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LIFO actual.

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By specific lot ID.

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By specific serial ID.

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•

Perpetual weighted average.

•

Periodic weighted average.

•

Retroactive perpetual average.

You might require different cost methods for regulatory or analytical purposes. For example, you might want to cost in FIFO order for tax reporting purposes, but use specific serial ID for customer profitability analysis. Cost Roll-Ups Within our standard costing environment, the cost of manufactured items, engineering changes, and configured items are automatically calculated based on an item’s product structure, routing, and applicable rates for the manufacturing business unit. You can perform cost roll-ups for a single item, a range of items, a group of items, or all items within a business unit as well as for any cost type. You can: •

Recalculate costs at lower levels or use existing item costs.

•

Compare cost versions to determine impact of changes in cost.

•

Roll up costs based on production or engineering bills of materials (BOMs) and production/master or engineering routings.

•

Use the last purchase order price for an item when rolling up standard costs for purchased items.

•

Use a weighted-average cost based on purchase receipts when rolling up the standard costs for purchased items.

•

Track errors encountered in the cost roll-up process by means of an error message log so you can review the errors, take corrective action, and then roll up the item costs again.

Production Cost Updates With the PeopleSoft Cost Management solution, you can update existing standard costs using the costs associated with the cost type and version you select. Use it to: •

Update all items or a single item.

•

Select the cost type and version to use for standard cost updating. Standard costs are used in inventory costing, transaction processing, and variance analysis.

•

Update inventory values—including stores, finished goods, inspection, and work-in-process (WIP)—based on new standard costs.

•

Create detailed reports that analyze the costing ramifications of production.

•

Analyze the impact of updating costs without affecting your current standard costs.

Dynamic Inquiry and Report Capabilities PeopleSoft Cost Management accommodates the reporting needs of both financial and management accounting. Use it to:

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•

Display item costs by cost version, including this level and lower level costs categorized by cost element.

•

Create detailed reports that analyze the costing ramifications of production— including production variances and potential production variances by tolerance.

•

Review labor and machine efficiency and use.

•

Compare cost versions after rolling up two separate cost type and version combinations to analyze the impact of BOM, routing, or rate changes on item costs.

•

Display manufacturing and engineering BOM costs including costed BOM summary, component detail, and main item detail by item.

•

Analyze costs due to engineering changes and compare the revised item cost to its current standard cost.

Inventory Accounting PeopleSoft Cost Management provides a number of different methods for costing your inventory. In both PeopleSoft Inventory and Manufacturing—on an item-byitem basis—you can choose standard, weighted average, or actual cost. You can: •

Define the accounting entries for each transaction. You can choose to define the accounts by item, item groups, distribution types, and/or individual cost elements.

•

Define accounting entries for transferring material from one location to another. You can define interunit ownership, interunit inventory transfer accounts, and interunit shipment accounts.

•

Create costed transaction records for all inventory business units or for a specific business unit only.

•

Use intraunit processing to create balancing entries for transfers between ChartFields (such as Fund) within the same business unit.

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Create accounting entries for posting to PeopleSoft General Ledger or a thirdparty general ledger system.

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Easily and selectively view accounting entries, accounting entry detail, and item cost history.

•

Ensure for each inventory putaway, the entries to the accrued liability. ChartFields from PeopleSoft Cost Management are reconciled with the entries from accounts payable.

•

Analyze financial transactions by easily going back and forth from the account entry in the general ledger to the actual detail transactions that occurred in production.

•

Define inventory accounts by location to provide financial visibility based on where the inventory resides.

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Cost Performance Management PeopleSoft Cost Management enables you to efficiently manage and evaluate cost performance. You can: •

Close production for accounting with ability to reopen, if desired.

•

Provide WIP inventory value information on demand including material, labor, machine, and overhead components.

•

Create detailed reports that analyze the costing ramifications of production.

•

Calculate and display variances—configuration, usage, component yield, lot size, and routing process—on accounting close or while still in process.

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