Get a detailed overview of the trend of your company that is the costs it incurs and the profitability that comes from different areas cannot and should not be considered a marginal aspect. It is thanks to effective management control that we can, arrive at an in-depth picture of the situation, from which we can then establish the objectives and plan the marketing and sales strategies. However, how is it possible to place each activity under the magnifying glass, acquiring complete information and data? Having a SAP management system can be the best solution: In this article, Technis Blu, will present to you the method with which SAP faces the analysis of the business costs.
How does SAP analyse your business costs?
There is a profound difference between accounting and management control, although both are very important aspects for a company. The first activity allows you to combine costs and revenues, offering you a general overview of your business. Management control, however, leads you to define in depth on which areas your costs are absorbed, basing on this analysis you can then direct your expenses towards other activities, planning the management of your business to the millimetre. All this is possible thanks to components like, for example, the Material Ledger used for the analysis of the cost of the materials in SAP.
However, going into detail, how does SAP operate? The analysis of the business costs implemented by this management is based on both the analytical accounting and the industrial accounting and referred to several factors, such as:
- Accounting for cost centres (CCA): thanks to an innovative system, each cost is classified within a particular business area. In this way you can understand from the first glance which activities require higher or lower management costs;
- Activity Based costing (ABC): thanks to this method, the analysis of the full cost of the product is carried out on the base of the costs of every single activity necessary for its working. This leads to a better definition of individual costs and, consequently, to a complete and detailed view of the full cost of the product;
- Project System (PS): In this case, SAP is responsible for planning, recording and monitoring the costs and revenues that arise from the single order. In this way it is possible to know in detail the type of jobs that brings more profit to the company and, therefore, a greater profitability;
- Product costing (PCC): is the function that determines, through a series of specific analyses, the cost of the product and the service. It is particularly useful in order to activate wise managerial processes destined to render more efficient the entire production process.
- Accounting for profit centres (PCA): through a series of analyses, it is possible to allocate costs and revenues to the different areas within the company. The ultimate goal of accounting for profit centres, in fact, is to reproduce an in-depth business structure, establishing an annual budget and implementing a very detailed multiannual plan.
What are the benefits of SAP’s business cost analysis?
Thanks to the meticulous management control implemented by SAP, the best business management software on the market, you will have a specific vision of the areas and activities of your company where the different costs converge. This will make it easier to make managerial decisions to change the direction of your expenses. In fact, greater corporate control will result in better business planning, with the aim of minimising costs and maximizing profits. It is the only way you can actually run your company without having your expenses do it for you.
In this article, we have examined how SAP management software can be a valid tool in your hands for the in-depth analysis of the costs and the consequent planning of the strategies to be implemented to make your company be more efficient. In fact, only by studying thoroughly the origin of each cost, you will be able to apply all the strategies necessary to direct it towards the area that you think most congenial to get the maximum profit.
Would you like to deepen this topic with our experts and begin to understand how in practice that is in your everyday business life, can you help SAP? Contact us: Technis Blu SAP consultants will be happy to answer any questions you may have!