Cost to Make
Allocations + Rate Building
A true view of profits needs a robust method to allocate all costs that are not directly traceable to a specific product or service – direct and indirect labor costs, overhead spending, shared costs, and more. Finance teams that can shed insights on overhead spending are better positioned to make quick decisions as business conditions change. ImpactECS gives you the tools to assign drivers and accounts, dynamically calculate work center and overhead rates, and validate results to ensure every penny is assigned properly.
Step 1: Pool Data
Collect both production data from ERP, MES, and shop floor systems and spending from the General Ledger.
Step 2: Determine Drivers and Calculate Rates
Assign drivers and calculate rates using detailed product structure and production data.
Step 3: Allocate Dollars
Allocate overhead costs to specific products using a dynamically calculated rate.
Dynamic allocations and rate calculations with ImpactECS
- Define your allocation methods: Maintain user-defined allocation rules, drivers, and hierarchies to allocate spending to production or non-production cost centers.
- Calculate and simulate rates: Use production plan drivers to calculate allocation rates and run simulations testing the impact of rate changes on costs.
- Establish labor plans: Calculate detailed costs for direct labor, indirect labor, and overhead personnel based on production plan requirements.
- Energy and utility cost planning: Compute energy and utility costs using current rates and consumption trends.
- Cost planning across systems: Connect historical cost trend data from multiple ERP environments, track costs at the most granular cost level, and calculate budgets using accurate and appropriate cost drivers.
- Systemize tribal knowledge: Create sustainable costing processes by converting spreadsheets, homegrown systems, and employee knowledge into a centralized costing and analysis platform.
Resources
Get Quick Insights and Best Practices
Visit the Video Library >Is Your Product Costing Process Healthy?
Get your Score >Creating a Cost-Focused Culture
Watch the Webinar >Guide to Implementing Cost Systems
Watch the 30-min Q+A >Cost Allocations: Gaining Actionable Insights
Read the Article >Ready to see ImpactECS in action?
Get a glimpse of how we help companiesunderstand their costs and profits