planning & budgeting using sap cost center planning
DESCRIPTION
An introductory presentation to introduce Planning at Cost center level.Importance of Planning and BudgetingImportance of Cost Center PlanningWeightage of Conversion Costs and Operating Expenses.TRANSCRIPT
International Textile Limited – Information Systems
Cost Planning & BudgetingManagement Meeting
November 18, 2015
Objective
International Textile Limited – Information Systems 2
Cost Planning
Monitoring Actuals
Variance Reporting
Preventive Measures
Cost Reduction
Classification of Expenditure
International Textile Limited – Information Systems 3
Expenditure
Capital Expenditure
Upgrade Costs
Expansion
New Investment
Revenue Expenditure
BOM Related
Conversion Costs & Operating
Expenses
B A L A N C E S H E E
T
P R O F I T & L O S S
Historical Trend of Last 3 Months
International Textile Limited – Information Systems 4
Cost Element July 2015 Aug 2015 Sep 2015
BOM Related Costs 220 377 434
Conversion Costs & Operating Expenses 193 174 185
Total Cost for the Period 413 551 619
Conversion & Operating Cost as a % of Total Cost
47 % 32 % 30 %
Cost of Manpower 93 70 76Manpower Cost Proportion 48 % 40 % 41 %
Other Costs Proportion 52 % 60 % 59 %
------------ Figures in Millions PKR --------------
Way forward
International Textile Limited – Information Systems 5
Mapping in SAP
International Textile Limited – Information Systems 6
Department
Cost Cente
r
Expense
Head
Cost Elements
Cost Center
Cost Element
Conversion &
Operating Costs
Cost Center Structure
International Textile Limited – Information Systems 7
International textile Ltd
Operations
Terry Textile
Sizing
Weaving
Processing
CMT
Garments MJS Terry Trading
Services
Export Finance & Costing
Information Systems
SAP
Networks
Internal Audit
Cost Center Structure in SAP
International Textile Limited – Information Systems 8
SAP T-CODEOKENN
Cost Element Structure
International Textile Limited – Information Systems 9
SAP T-CODE: S_ALR_87013611
Future Action Points
International Textile Limited – Information Systems 10
Plan
Actual
Monthly Meeting of all HODs
Review of Costs & Variance Analysis
Last Date to Submit Cost Center Plans = November 30, 2015
Planning & Budgeting Techniques
International Textile Limited – Information Systems 11
Budgets
Fixed Budgets
Rolling Budgets
Incremental Budgets
Zero Based Budgets
Time Frame
International Textile Limited – Information Systems 12
Cost Center Planning Templates to be filled by:
November 30, 2015
Templates to be provided to Costing Department