Costing for Complexity is…. Complex.

“In today’s fast-moving consumer goods environment, consumers demand an increasing degree of differentiation. Serving this need comes at a cost.”

Accommodating the multiple SKUs that come from differentiation adds significantly to production costs for companies that produce fast-moving consumer goods. Cost accountants have an opportunity to provide significant value by assisting their companies in fulfilling customers’ desire for this customization while minimizing the costs. However, allocating the costs of carrying this many SKUs can be a challenge.

Read More at The Journal of Accountancy >

 

Better Decisions with Transparent Costing and Profitability Insights

“With companies under pressure to improve profitability, many seek higher levels of transparency into financial performance to uncover insights that can enhance decision-making and create value.”

Business leaders need actionable analytics to recommend actions that improve the bottom line; such as adjusting pricing, reducing product costs, and rationalizing unprofitable products or services. However, many companies rely on two-dimensional reports featuring a significant amount of words and numbers to facilitate a discussion or communicate a point. But in many cases, the information lends itself to more questions, requiring iterative versions to provide the answers.

Read More at The Wall Street Journal >

 

Leading Consumer Goods Companies Are Mastering Cost Complexity

In today’s fast-moving consumer goods environment, consumers demand an increasing degree of differentiation. Serving this need comes at a cost. Today’s consumers have completely changed the consumer goods environment because their demand is increasing, and businesses have to find a way to keep up if they want to remain competitive and profitable. Many goods come in several variations (size, flavor, ingredients, etc.). Meanwhile, shipping protocols for different countries vary, so the way individual bottles and cans are packaged together will be different depending on where the manufacturer is sending the products. These many variations of SKUs add significantly to production costs for companies that produce fast-moving consumer goods. Businesses have an opportunity to provide significant value by fulfilling customers’ desire for this customization while minimizing the costs.

Read More at The Journal of Accountancy >

 

Is Activity-Based Costing Worth It?

Manufacturing companies need to understand product costs accurately and in detail. This kind of information is essential for planning operations, pricing, and evaluating business margins. Activity-based costing helps manufacturers identify what products are truly profitable, the true costs of products for pricing, and what activities are driving costs. However, activity-based costing is known for being difficult to apply and labor-intensive due to the extensive data needs of the process. The trick to knowing if activity-based costing is worth the trouble is first finding a tool that can compute accurate product costs and has the capabilities to take the labor and data needs off your hands.

Read More at The Business Case >

 

How Effective is Your Costing?

Many companies are using a costing platform that is more of a “one-size-fits-all” system. What they don’t realize, is that the insights there are getting from these systems are inadequate for important decision making because they aren’t tailored to their specific business needs. Another barrier to effective costing is understanding the difference between the costing done for external financial reporting and managerial costing – costing done purely for an organization’s internal use. The goal of managerial costing is to ensure information for decisions reflects the characteristics of the organization’s resources and operations. Yet most companies have inadequate managerial costing systems, relying on systems designed primarily to meet external financial reporting standards.

Read More at EBN Online >

 

Simplifying Cost Control In Real-World Complexity

“Spending decisions are best made with collaboration and guidance.”

Now more than ever, employees expect more freedom to spend capital much in the same way they buy their personal items. And while most finance organizations are finding ways to eliminate paperwork, streamline processing, and provide mobile access, CFOs are only chipping away at what they need the most- total spend management. With the system of checks and balances that total spend management delivers, employees are given the tools and insights they need to purchase quickly, appropriately, and, above all else, intelligently

Read More at The Digitalist by SAP >

 

3C Software to Exhibit at Financials 2016

 

3C Software is proud to announce that they will be exhibiting at SAPinsider’s Financials 2016 conference to offer proven advice to attendees. The event takes place at the MGM Grand in Las Vegas, March 15-18, 2016. Attend to learn proven methods for continuously improving and transforming key financial processes.

Every year, in collaboration with SAP, SAPinsider Events presents the most important Financials conference for professionals who use SAP® functionality for financial and managerial accounting, controlling, planning and analysis, cash management, reporting, closing, and consolidation. This event not only offers a detailed look at the entire range of capabilities within SAP financial solutions, it facilitates learning, networking, and one-on-one conversations with expert speakers.

If you’re able to attend the event, be sure to stop by 3C Software’s booth (#1100) in the exhibition hall. Our team will be ready to show you the latest tools to enhance you SAP cost and profitability capabilities with ImpactECS by 3C Software. We’re also hosting a conference session – “Improved Profitability Through Detailed Costing, Advanced Analytics, and Reporting” – where we’ll review case studies of four different manufacturing companies working to improve their profitability by leveraging financial and operations data.

You can get full details on the agenda, as well as receive a discount off the registration price by visiting www.financials2016.com/3CSoftware or by calling +1-781-751-8700.

Contact:

Paige Wilson
Marketing Associate
paigewilson@3csoftware.com

About 3C Software

3C Software, developers of ImpactECS™ and Impact3C®, was founded in 1988 and is a leader in detailed cost and profitability management systems. Headquartered in Atlanta, Georgia, 3C Software serves clients in several industries including process manufacturing, distribution, and financial services. 3C Software’s rapidly implemented solutions work with all accounting methods, are simple to maintain, and handle unlimited calculations and variables. For more information about 3C Software or ImpactECS™, visit www.3csoftware.com or call 800-226-2036.

About SAPinsider

SAPinsider, published by Wellesley Information Services, is the premier source of information on products, services, and strategic initiatives coming from SAP and its partners. More than 250,000 customers in 70 countries rely annually on education and training materials from Wellesley Information Services to optimise their investments in SAP solutions. Wellesley Information Services is the publisher of SAPinsider, insiderPROFILES, and the SAPexperts knowledgebases, and is the producer of SAPinsider conferences and seminars. For more information, visit www.SAPinsiderOnline.com.

SAP is a registered trademark of SAP SE in Germany and several other countries. Wellesley Information Services is not affiliated with SAP SE or any of the SAP SE group of companies.

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries.

All other product and service names mentioned are the trademarks of their respective companies.

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A Quick Review of Transfer Pricing

One of the most challenging issues our manufacturing customers face managing intercompany transactions when one department, division or subsidiary sells goods to another entity within the organization.  These companies employ transfer pricing methodologies to account for the movement of goods and revenues.

While these intercompany transactions are impactful to any organization that has more than one entity or located in multiple jurisdictions, large, multi-national companies that have thousands of transactions each period need a robust way to track, analyze and report the movement of goods and dollars.  Additionally, these companies need the ability to effectively set transfer prices that are appropriate to the needs of each entity of the business.

According to “Intercompany Transactions Snowball” in this month’s publication of Strategic Finance, there are three types of intercompany transactions: Downstream, Upstream and Lateral.  During consolidation, it is critical to understand the transfer relationship in order to effectively report performance which has a direct impact on the company’s tax exposure.

[caption id="attachment_5985" align="aligncenter" width="500"] Source: “Intercompany Transactions Snowball”, Strategic Finance, 04/15[/caption]

After determining the relationships between each entity, the next step is to determine exactly how the transfer prices are set.  The AccountingTools blog chronicles each way a company can determine transfer prices:

Market rate transfer price – The transfer prices are set at the market rate.
Adjusted market rate transfer price – Market rate pricing with adjustments for reduced risks
Negotiated transfer price – If the market price is unavailable, entities can established through negotiations.
Contribution margin transfer price – Create a price based on the contribution margins.
Cost-plus transfer price – Determine the price by adding a margin on top of the cost of the transferred items.
Cost-based transfer price – Each entity transfers products to the next at cost leaving the final entity with all the costs and ultimately recognizing all of the profit.

Each company has to weigh the benefits and challenges of these approaches to determine the best approach for their business.  But one thing is certain.  A flexible, robust system is a requirement to efficiently and accurately track all of the moving parts to any transfer pricing scheme.

ImpactECS is an integrated solution that provides the tools to both accurately calculate transfer prices and clearly reconcile transfer price transactions on one platform.   By linking with directly with ERP and other data sources, transfer pricing analytics can become one component of an end-to-end cost and profitability approach supported by ImpactECS regardless of the methodology selected.

 

3C Software to Sponsor Controlling 2015 Conference

February 20, 2015 – 3C Software is pleased to announce that they will sponsor the upcoming Controlling 2015 conference. The event takes place at the Westin San Diego Hotel in San Diego, CA September 21-24, 2015. The Controlling 2015 conference offers SAP professionals an unprecedented opportunity to obtain Controlling-focused education and take advantage of numerous networking opportunities to connect with peers and industry experts before, during, and after the conference.

3C Software is the Controlling 2015 gold conference bag and also exhibit at the conference. Stop by 3C Software’s booth to obtain information on ImpactECS, one of the most versatile modeling platforms available for finance and accounting professionals.

Controlling 2015 is the only dedicated conference for SAP professionals working with the management accounting (CO) module of SAP. The conference features five tracks: SAP Overhead Accounting, SAP Product Costing, SAP Reporting/SAP HANA, SAP Planning, and Expert-led SAP Controlling Networking. Speakers are nationally and globally recognized for their expertise in SAP FI/CO. Case studies will be presented by SAP customers including Eli Lilly, Lundin Eagle Mine, and Woodward. To learn more about the conference and how it can increase your knowledge of CO best practices, visit Controlling.erpcorp.com.

About 3C Software
3C Software, developers of ImpactECS™ and Impact3C©, was founded in 1988 and is a leader in detailed cost and profitability management systems. Headquartered in Atlanta, Georgia, 3C Software serves clients in several industries including process manufacturing, distribution, and financial services. 3C Software’s rapidly implemented solutions work with all accounting methods, are simple to maintain, and handle unlimited calculations and variables. For more information about 3C Software or ImpactECS™, visit www.3csoftware.com or call 800-226-2036.

About ERP Corp
ERP Corp is a leading SAP consulting services and solutions provider specializing in SAP Controlling and Financials. ERP Corp also produces Controlling 2015, the only dedicated conference for SAP professionals working with SAP management accounting (CO).