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0:09
Hello everyone and welcome to today's dynamics. 365 TechTalk, today's topic. is cat cost accounting part one overview. My name is Tim and I will be your moderator today. We are broadcasting this session through teams, live events and. the audio can be heard through your device speakers.
0:29
This session is being recorded on behalf of the Microsoft Corporation. When you join this event, your name? Email. address and or phone number may be viewable by other session. participants in the attendee list by joining your. r agreeing to this experience.
0:45
The recording will be available on the TechTalks community. Dynamics page within the coming weeks.
0:52
If you have questions for our presenters or need support. please use the Q&A panel located on the right side of your. screen. Our presenters will be responding to your questions. throughout the session and in a live segment if there. is time remaining after the presentation. Thank. you for your patience during these announcements presenting. for us today from Microsoft. We have senior fast. track solution architects, Alejandra Cabrales, and Amar Kumar. Alejandra, over to you to get us started.
1:24
Thanks Dean.
1:26
Good morning, good afternoon, good evening. Wherever you are joining. us from. Thanks for joining us today to talk about cost accounting.
1:36
My name is Alejandro Cabrales. I'm a senior Patrick solution architect. for Dynamics 365 here at Microsoft. I have added my contact information and feel free to reach out. if you have any questions. I will hand it over to Amar to introduce himself.
1:52
Thank Alejandra. Hello everyone. My name is Amar a. senior fast track solution architect for Dynamics 365. at Microsoft. Do do reach out using. the contact details shared. Over to you and Andrew.
2:07
So they station is the precision of a two part TechTalk series. Into this TechTalk, we will go through those accounting overview. and then excision, we will talk about overhead calculation in cost accounting. Second session is planned for April 1st.
2:25
They and the fertilization is as follows first. we'll provide an overview of cost accounting.
2:32
Next will delve into the building blocks of cost accounting. After that, we'll discuss the cost accounting lecture.
2:40
We then moved on to the cost control workspace.
2:44
We'll wrap up the presentation with a summary of recommendations and. a list of resources for further learning followed. by a Q&A session.
2:55
So let's dive now into our first topic, cost accounting. overview.
3:02
What is cost? Accounting cost accounting enables? you to analyze, summarize and evaluate cost data, so. hat management can make the best possible decisions for cost. control, price updates budgets and so on. Dynamics 365 cost accounting just as Terra collected. from various sources, such as the general Ledger. subletters budgets and also data imported. from outside dynamics 365.
3:30
Both financial, accounting and cost accounting are important. for an organization, but they do have some differences. The main objective of financial accounting is to. provide information about the financial situation performance. and cash flow of an organization to external. stakeholders such as investors, creditors. and regulators. The main objective of cost accounting. is to provide information to internal stakeholders such. nagers to help them making better decisions.
4:00
isions about cost control. Pricing and resource allocation.
4:04
Financial accounting helps you to record financial entries. in the books of finance and in cost accounting you will find. the record of the cost of all your operations.
4:15
Financial accounting is to show the financial health of. the organization using financial statements balance. sheets etcetera. And the cost accounting involves teachings about the cost tracking. which is leveraged by cost of content and cost center. managers.
4:34
Cosequin thing is important for multiple reasons, such as.
4:39
Constructing it helps you to classify and. analyze cost, so you can realize where you're spending more. for instance.
4:48
Cross the structure cost accounting provides detailed information. about the costs of various activities, processes and products. This information is essential for understanding. and organizations cost structure and for identifying. areas where cost can be reduced.
5:05
Internal managerial decisions cost accounting. helps management with the actionable information which can. be used to make informed decisions related to pricing. cost optimization, etc.
5:19
By analyzing the cost of producing goods and services. managers can determine the appropriate pricing. strategy that will enable the organization to earn a profit. while remaining competitive in the market.
5:33
Understanding the cost of different activities and processes. managers can estimate the cost of the future operations. and develop realistic budgets.
5:45
By using cost accounting, you cannot identify in an inefficient. operations and help your organization to control cost. by identifying areas where costs can be reduced. and optimized, seduced of resources. And ultimately by providing relevant information. on the cost of production and operations cost accounting. helps organizations to achieve their financial and strategic objectives. Now let me handle over to a mark to explain the building blocks of. cost accounting.
6:16
And kalandra to begin, let's explore how cost. accountants and managers can access relevant cost. detail using cost accounting module. The module facilitates. tracking and analysis of cost against multiple periods. providing a clear picture of cost trends over time. Before delving into module configurations and setup. let's take a quick look at a demo of cost accounting output.
6:46
So in this demo, let's navigate to cost. control workspace. That is where the cost accounting output. can be seen. Now if you'll see we have multiple statement. and through all these statement we are going back. to cost Control USA statement. That is what we have. configured and in this one you. can see multiple periods. We'll select the period where we have configured. some data that is August of 2022 and. once we have gone to that period we'll see that.
7:17
And the cost has started reflecting, right? So you'll see in the grid. there's a structure which talks about the structure of cost which which. comprising of total cost and then you can see the different node. which talk about the various component of total cost. right this structure that you are seeing in this. diagram or grid that is coming. from post element hierarchy, we'll be talking about. that as we progress in this demo and cost.
7:43
element hierarchy is a combination of multiple cost element. And in. Cost element basically translates from main account. in chart of account. So this hierarchy that you are seeing in the grid. is coming from cost element hierarchy and similarly if you'll. see there's a filter at the top which talks about cost object. dimension hierarchy in some big cost object dimension or. rarchy talks about a basic structure of. Organization, right. And you can define it the.
8:11
way you want to define. So in this case if you'll see organization is been. led by CU and then you have multiple CIO and. care for right now we are looking at the cost data of CIO. we can go deep and look into what individual. cost centers which is 008. Now if we'll select 00. and click on OK we would be able to. see the cost data only for cost and 38. right let's click on OK and now you see what. we are saying for cost. The 8.
8:40
The cost is only $6000 and. that cost is coming completely from direct personal cost, right? So all the main account which belongs to direct personal. cost would have given this amount and we can also see. in this structure.
8:55
That it provides the options to add or remove some additional column. if they didn't need and that can be leveraged. to find additional detail in. Cost accounting module using the post control workspace with. that, let's move on to the demo and configuration. configuration and setup of this module.
9:16
So as we have just discussed the cost accounting. module enables the analysis of cost across an. organization. And to facilitate this analysis organization. from cost accounting lengths needs to be a structured. hierarchically with respect to relevant cost object. Right. So if you'll see this slide in this. slide, we are talking about a temple organization that is structured. into a hierarchy. And in this hierarchy. the admin node aggregates the cost of human resources.
9:46
and finance and production node aggregates the cost of packaging. and assembly.
9:52
Finally, the cost of production and administration node combines a.
9:57
To make the overall cost of the organization.
10:02
Moving on. With this slide, we are talking about. the important building blocks of cost accounting and dynamics. 365, which are cost accounting dimensions.
10:15
Cost the condition that cost accounting dimensions are core to cost. accounting in dynamics 365 and they're being used to categorize data. in the module. Further analysis and reporting.
10:25
They're just three main cost accounting dimensions in. Cost accounting. The first one is got element. They are needed to track. and categorize cost, cost element corresponds. to cost element item in chart of accounts, right? And again, further, if you'll talk about these cost. element dimension can further be classified into primary? and secondary cost element when we talk about primary? cost element?
10:54
It facilitates the cost flow from financial accounting to cost accounting. and secondary cost element are internal to cost accounting. module and they are created within the context of cost. accounting to track overhead cost flow between different. cost object and we'll cover. Secondary cost element as part of our next TechTalk. which is planned for 5th of April.
11:18
Moving on.
11:20
Second important building blocks which cost object cost. objects are used as cost control unit in cost accounting. module. Any financial dimension can be configured as cost object. In this session we have used cost center financial. dimension, edge cost object.
11:35
And cost. And revenue can either directly post it or allocated. to cost objects. So any financial entity that we are doing, we are doing. against a. Financial dimension and when we. configure that financial dimension as a cost object, we would. be able to track cost again the financial dimension and also. maintain some kind of control with that financial dimension. As we discussed, any financial dimension can be configured as. cost object. For example, product cost centers, departments.
12:04
project if they have been configured as initial dimension. Both accounting module will facilitate them to be created. as a cost object.
12:14
And any cost controlled that we're building. in this module, which is to be referred by cost, accountant and managers. that would be done through cost object for. example, a manager associated with admin cost. center would be interested in cost against admin cost center. and so on and so forth. Finally talking about the. 3rd. Cost element cost accounting dimension would be statistical. dimension and they are used to capture non financial. entry for example.
12:44
Electricity electricity consumed in units by. any of the cost center or for example area of facilities. of different departments and if. we want to track these activities which are non financial. in nature will lead to use statistical dimension.
13:03
And these dimensions are being used.
13:06
4. Cost allocation and when we'll talk about overhead calculation. in the next TechTalk, we'll be talking more about how. we can use statistical dimension for that purpose.
13:18
Did that. Let's move on. So to highlight. what we have just talked and origin of different cost. accounting dimensions.
13:28
Then we'll talk about cost element it comes. from chart of account.
13:34
And for example, any main account which are. part of charter account can be created as cost. element in cost accounting. Similarly when. we talk about cost object, they flow from financial. dimensions and any. Financial dimensions such as cost centers and product could be configured. edge cost object in.
13:55
Cost accounting module.
13:58
And finally, talking about statistical dimension. they are coming from static projects and data these. are created in cost accounting module based on business requirement. though the value of a statistical dimension which are also called as. statistical measure can be derived from. either dynamics 365 data sources and. it can also be imported from outside based on. The information that needs to be configured. in the system, for example if employee is the dimension.
14:27
then employee data for each cost center can be derived from. employee master in Dynamics 365 on the. other hand, if we are talking about electricity consumed. as a statical dimension then this data can. be imported from outside based on the electricity. bill received by the organization.
14:46
So that is how you differentiate between where you want to. bring the statistical dimension data.
14:52
And that let's quickly.
14:55
So in this slide, what we are looking at, we are looking at a. posted financial entry and. When we'll talk about posted financial entry these entry. eventually when imported within cost. accounting, they become cost entry and.
15:12
The main account.
15:14
That is linked with every record gets. translated into cost element and.
15:22
The financial dimension linked to that record is getting translated. into cost objects and when we'll see the. demo of that, we'll be talking about how this is being configured and how. we can structure that in the cost accounting module.
15:37
Moving on.
15:39
Let's talk more about cost element dimension in.
15:43
Dynamics Recipe 5. So cost accounting dimensions. are one of the core concepts of cost accounting, and it is. sed to categorize and track the cost. Blue.
15:54
So cost element flows flows from charter Web account. For example, if you'll talk about parole allocation, production costs. selling expensive, any of the main account that is part of chart account. eventually gets truncated in cost accounting.
16:09
So for example, cost element Dimension members flows from. main account Edge configured while defining. the cost element dimension and main account from charter account. becomes cost element. So for example if you'll see right now 600. hich payroll allocation that is. a cost element dimension and that is what we have configured. when we have imported the cost element dimension from.
16:33
Chart of account. And we also discussed that these elements. could be defined as primary cost element and secondary cost element. When we talk about primary cost element, they are created automatically. When these cost elements are imported through data connectors. and we cannot create cost element. Of primary primary cost element manually. but there is one more which is secondary cost. element and then we'll talk about secondary cost element secondary cost.
17:02
element can be created manually and they. are relevant only in the cost accounting module.
17:09
And the secondary cost element are used while running cost. accounting policies and we'll be discussing about cost. accounting policy and how do we use secondary cost elements when we'll talk about. overhead calculation in the next.
17:22
Moving on.
17:25
Second, building block is obviously cost object, dimension and cost. are assigned against a cost object dimension as part of. analysis, hidden cost accounting. The objective is to measure. he cost against cost object by estimating. and allocating cost to them. Any financial dimension can be configured. as cost object for this tip talk series. we have used cost center financial dimension as. cost objects on the screen. You can see all the cost centers.
17:53
That is part of. Our chart of accounting structure has been brought in. as cost center in. Cost accounting module and you can see that these are all defined. as cost objects. So eventually financial dimension gets. translated into cost object in cost accounting module.
18:15
And finally, talking about cost object. cost object also gets created automatically and there's no. way to add cost object. Manually. That means when we do the data import. all of the cost center linked to the data definition. gets created automatically and we are not able to. At manually any cost object.
18:39
Finally, moving on the. Moving on statistical dimension, these. and its members are used to register and control non monetary. entry and cost accounting. That means statistical. dimension members can only be import it can. be imported through data management entity and it can also. be created manually. Within a specific statistical dimension. So right now if you'll see all of these numbers. that you can see on the screen are have been imported through. data management.
19:10
And if we quickly look at the definition of 1. e such statistical dimension member then. we'll see that.
19:19
All employees is a member within. this statistical element and these elements. are used at allocation based in cost accounting policies.
19:30
Such as both distribution and cost allocation, and then we'll talk about. allocation basis and cost. Accounting policy will be discussing. the role of statistical dimension in more detail. and we'll see how it impacts different. calculations that we can achieve through cost accounting module.
19:48
Moving on and the last part is. dimension hierarchy. So if you remember the quick demo that we have seen in. that we talked about cost, object dimension, hierarchy and cost. lement, dimension hierarchy, right. So the dimension hierarchies. can be created based on all three building blocks. which is cost element dimension, cost, object dimension and statistical dimension. And these are very instrumental when we'll. talk about the reporting structure that fits the organization.
20:14
requirement. So in the demo that we have seen like grid structure was. coming from cost element, dimension hierarchy. And the filter at the top which was providing the organization structure. that was coming from the cost object dimension hierarchy, right? In addition to providing reporting structure.
20:30
The dimension anarchy also have very crucial role to. play when we are defining cost accounting policies, right and. We'll be talking about that and if. you are also interested in building security policies then.
20:46
Dimension hierarchy can also be used to define. security setup in what kind of access you would like to. provide to the cost center managers, and we'll be talking if. you're interested in that, please refer to this documentation we talked about. how you can define security setup. In the cost accounting module using. dimensions hierarchy.
21:09
Moving on. And. For example. If it if we'll talk about this particular. hierarchy in this hierarchy, we are talking about the finance and human. resource cost centers cost dot, aggregated admin and. packaging and assembly cost center cost dot aggregated at production and. admin and production eventually gets aggregated at manufacturing. So the complete cost of manufacturing organization. is coming from this structure of cost centers. right? So if you want to define this sort of cost.
21:41
Dimension hierarchy in cost accounting module. Then you will have to use cost object hierarchies. cost, object hierarchy, facilities. A hierarchy which is based on the financial dimension. that we have. Similarly, we also see a. grid which gave the idea about how the. different cost gets aggregated at a total cost. So in this. one total cost is made up of personal cost and production. cost and eventually drill down to production personal cost.
22:09
Personal cost is made up of travel expenses and employee in. he early production cost is made up of electricity and. machinery depreciation, right. So if you want to achieve this. kind of. Hierarchy then. We'll have to leverage a hierarchy. based on cost element and this cost element hierarchy will facilitate. the bottom structure and the cost object hierarchy will facilitate. the structure which defines the org. hierarchy. For a typical organization.
22:41
So with just the basic covers, let's quickly have. a look at. The demo of the configuration that we have talked about in this. demo we'll talk about.
22:53
How cost object dimensions can be configured? And 1st element dimensions can be configured in all. the dimension that we have talked about can be configured and how we can define. the hierarchy based on that with that.
23:10
Let's navigate quickly to cost accounting module. And in the cost accounting module will navigate to cost. element dimension and that is where we define the definition. of cost element. So when we click new. We give any name for this and. if you'll see right now, there are three ways you can bring data for cost. element using the finance and operations connector to doing the. imported dimension member. And there's also a way to bring this. dimension member Fusion.
23:40
Then with X in this one, we'll be using finance and operations connector. Once we have done that, let's save this. and after saving this.
23:50
We would be able to define where the data is going. to come from, so let's click on the configure data provider once. we click on the configure data provider.
24:00
We'll be able to define where we are thinking the data from. right? So we are bringing data from the sheer chart up account and. we can also facilitate what? is the data that we want to bring, right. So filter off chart. filter of main account, right. We can see all the main account. f type expense we can bring. And additionally we can. also provide. A definition of from and two main account so. right now we are giving a definition of from and two main account that.
24:27
means any account main account which is belonging to that trench. can be imported. So if now we'll go. and run the process of import dimension member. Just well, this will bring all of the depth. defined ranged dimension member as. part of this cost element dimension so. Once we have done that, we would be able to go and validate those. dimensions in view dimension number so you can see right now it is. only bringing in the data from that range that we have explained and.
24:55
all the data is only of primary cost. element dimension. So if you want to add, secondly, we have to click new, so we'll not we are not covering that. We'll be talking about that in the next. demo. So this is how you create. cost element dimensions as part of cost accounting. So once this has been built, let's quickly move on to. Cost object dimension. The setup is almost same only in. the case of cost object dimension the source. of data would be financial dimensions. So let's quickly define.
25:26
the name here. And the one that name is defined again, we'll have to select which data. provider we are going to select. Again, we have three data provider in this. case it simply go in and define finance and operation and here. you'll see there is no range. We have to say that this. First object dimension is going to come from this so. we highlighted that the cost object that we are using is cost centers. and that is what we have selected now once.
25:51
that is done, we can again run the process of input. And once the import is completed, we would be able to see all. the imported dimension member as part of this so. we can see all the dimension Member which has already been imported based. on the definition that we have just made.
26:08
Once this is done, let's quickly also move on to.
26:12
It's statistical dimension member, so we highlighted that. this dimension Member can either be manually created or. o be imported so we have already imported some data in. n imported statistical dimension member. So you'll see this section for imported data and in that let's. ckly navigate to imported statistical. dimension member link.
26:33
So you will go there. Then we would be able to see that. as imports first identified event we have imported. all of these dimension Members, right? So let's quickly. go and bring that dimension member as part of cost. accounting. So for that we again go back to. The form click on new, select the name of this dimension. And provide data provider. In this case data providers only imported. so there's no way you can bring from FN because F doesn't have. any data for that.
27:02
And now we'll have to select imports those identifiers, remember. it was event we have selected event and clicked OK once. we have done that the process this process is the same we. run the import.
27:14
Bet and when the import batch is done, we would be able to see all. the dimension which was part of the event in addition if. f let's say we want to add a manual dimension, we can do that. Let's see. we want to add areas of facilities as a. dimension member here, right? So we'll add that.
27:31
And while the name is defined, we can also provide what? is the unit that is going to be for this dimension member. right? So we can also define the unit.
27:41
Which is going to be any unit square. foot, square yard or whatever is that you want to define so. once that has been done, all the three main building. block of cost accounting has already been configured. and now we can move on to the next step. which is going to be the definition of.
28:03
Dimension hierarchy.
28:05
Let's with that. Let's quickly move on to.
28:09
The next demo.
28:11
In this demo, we'll be talking about dimension hierarchy. and how we can define different kind of dimension hierarchy as. part of cost accounting module. So let's quickly.
28:22
I thought the demo.
28:24
We are going to navigate again to a form called. dimension hierarchy and in the dimension hierarchy form we. would be able to. We would be able to create. all the necessary dimension hierarchy that we need. for our reporting purpose, right? So let's quickly. move on to that and you'll see. A lot. Many dimension hierarchy already created in this demo. we would using CSPL which is going to give us cost element.
28:50
Hierarchy and organization which is going to give us.
28:54
Cost center hierarchy. So these are the two ones that we will. use, but we'll also quickly look at.
29:01
How we can configure and what are the kind of information that? we can define as part of this dimensional Archy? First thing that? we look at is the cost object dimension hierarchy and we have. already opened organization. So you'll see in this hierarchy we have. configured organization in a way that CU is being reported by. CEO, CFO and CIO and if you again go into C. IO they have multiple leaf. nodes and if you select any of the leaf nodes for example let's say.
29:26
if you are selecting human resource or finance then you would. be able to see human resource. Any cost center which is from 12 to 12 all. the cross from that is defined as human resource cost similarly. For sales, it is from 9:50 right? So. we can also give a range here. So let's say if in a case 10. 50 means sales, then all the costs which is going to. cost center 11:50 would be defined as the cost. for sales.
29:53
So that is how the cost center.
29:57
Because object dimension hierarchy works, it provides a flexible way. to define the hierarchy based on the organization need and. how the process is going to be stacked.
30:07
So once. This dimension hierarchy has been built. We can quickly also look at. a simpler hierarchy based on.
30:17
Both object. So let's quickly look at all the other. score USDA that you wanna have that we have created which. we'll talk about a very simpler hierarchy.
30:26
Which doesn't have the complexity that we have seen in the organization. So you can see in this organization what we are seeing, see EO is. being reported by CFO, CMO and CIO and they are the. leaf node and now all the costs which is coming from 11:50. is been defined as the cost for Co. And similarly. This is how we can define.
30:48
Anarchy, based on cost, object and. ow if we'll talk about a next hierarchy. that is going to be cost element hierarchy that would provide us. a hierarchy based on different cost element that means all. the costs that is flowing from main account for let's quickly look. at a hierarchy for Cpl which is a.
31:09
Which is a hierarchy based on cost. element and we'll see how that. hierarchy provides a way to achieve. How the cost is we expect. So in this case, if you'll see total cost. is being created from personal cost expenses and secondary cost. allocation. And finally if we. go into the details of personal cost, it is coming from these. three nodes. And now if you want to understand. how the direct personal costs are creating any cost which is flowing to.
31:38
these main accounts range, they would be defined as. Direct personal that means you know 60210026. personal cost. Similarly if. we'll talk about business travel, then we're talking 601500. to 601509. Any cost going to these? many accounts would be defined as.
31:59
Business driver so that what you can see is. We can define detailed hierarchy that provides. us a reporting structure. that we'll be using as part of our.
32:13
Our module configuration and we moved. to the next one. So with that let me. hand it over to Alejandra for the next topic. which is configuration of cost accounting Ledger. and we'll be seeing that how all the configuration that we have. done combines together in the cost accounting over to you. and Andrew.
32:38
Thank you, Amar.
32:42
Now let's talk about the cost accounting later and it's configuration.
32:49
Because the container letter serves as a central hub that consolidates. these very configurations or facilitate cost analysis. the definition of cost accounting letter includes configuration of. Actual cost and budget entries.
33:04
Fiscal to facilitate the period wise. cost analysis.
33:10
Currency and exchange rates set up to handle multiple currencies. And the ability to handle data from multiple legal entity.
33:22
The computation of the cost accounting letter consists in the following. The coastal contained letter landing page setup includes. critical configurations such as cost, element, physical. calendar, currency exchange rate, and. efault dimension hierarchies for cost and statistical dimensions.
33:41
The next step, which is the definition of cost control unit. is another important configuration as all cost. entries into the letter are made against the select cost. object within the cost control unit.
33:53
The cost control unit is also essential for effective reporting. and cost analysis.
34:00
Custom budget entries into the cost accounting letter is achieved. through the configuration of actual and budget person. Both serve as the foundation for essential components. in cost accounting, including finding data. sources. Generally, their and budget entries. Statistical. measure and period calculations.
34:21
After the completion of cost accounting lecture, set up the. processing of source data from the general letter or. through that management. Imports can be started. which we will cover in a short demo after the next slide.
34:37
Source data processing is important step to bring relevant. cost entry into cost accounting Ledger based. on the setup that has been done.
34:47
Data is processed for a specific fiscal period and the. definition of fiscal period comes from the fiscal calendar. linked to the cost accounting letter.
34:58
Actual version deals with posted financial aid. entry and the configuration and processing of actual. version brings period wise posted. journal entries into cost accounting later.
35:11
Actual version. We also have the budget version. which brings in data from budget records for a specific. period into cost accounting Ledger. Entries made through budget version are budget. cost entries.
35:26
The results to a result observed data processing. can be validated in the process journal. The journals are getting created with respect to the fiscal. periods and in case of a period is processed. multiple times. Only the incremental data is brought into cost accounting Ledger.
35:46
Once the source data has been processed.
35:49
It is classified against the cost elements and costs of. the combinations. And it is processed, data can and this process data can. be reported in a cost control workspace. Let's continue with the demo for cost accounting letter setup. and then we will move to the last section of this vector group. where we will configure the cost control workspace over. to you Amar.
36:17
Thanks elandra.
36:19
And now let's review how to configure. the cost accounting Ledger.
36:27
Moving on.
36:30
Let's quickly navigate to.
36:33
Cost accounting Ledger and if you'll talk about cost accounting. Ledger, this is where we define all what we have explained physical calendar. Accounting currency, what's exchange rate? Which cost element? that we're talking about, right and if? we need any default hierarchy, let's create a new. cost accounting. Ledger here and in this case the. cost element we have already selected. Based on that we. have defined earlier we and then we are selecting the physical.
37:02
period which will provide the definition of periods. that will be using the cost accounting. We are also providing the definition. of currency and exchange rate that. is going to be used and then finally statistical. dimension, the default hierarchies are not. mandatory for configuration. It can be configured but. it is not mandatory. Skipping that for this. Presentation. The next one is the definition. of cost control and that is where we link our cost. object to cost accounting Azure.
37:34
So let's click on. The new while we click on new we define we. give a name and then.
37:42
Which cost object we're going to select here in this case. we are selecting cost centers and we are also providing. default cost. Object object dimensionality should not necessarily. but just for the configuration we are doing it and now if. e'll talk about.
37:58
Want this demo is 1. This setup is complete. We can also look. at if any data has been processed. So if the data. would have been processed we would be able to see the cost entries but. just because we have created this Ledger and there's no data, there's no data. processed for that.
38:13
No.
38:15
Next would be the actual version and budget version. Actual version is where. we bring data from main account posted. main account and budget version is where we bring the budget data that. has been posted in budgetary sisters right so. o let's click on and first thing we have to do is we have to define where. the data is going to come from and that definition. is being happening in managed through data processing is to process the data. and period calculation is the.
38:40
Subject Of our next TechTalk. So let's define. the data source here and in this data source we are.
38:48
I'm going to define where this cost entries. are going to flow from, right? So we are selecting, giving. name and we are providing the data provider which is finance. and operational data provider here. And we are also providing definition of. cost element. Now if we'll go on to.
39:04
Define the data provider.
39:07
We would be able to select which legal entity the data is going. to come from, so in this case the data is going to come from USA legal entity. that we have created for this and we are bringing data from. current posting. There. Module provides flexibility to. bring data from other posting there also but we have just chosen current. posting there because that is where we have already posted some data.
39:28
With that. We can also define. Statistical measure. But we are not doing it right now, we'll. be talking about this when we'll do the next. overhead calculation session.
39:40
Now we are going on and processing the data for. Already posted General Ledger and this processing is. what brings the data in the cost accounting Ledger from GL. module right. So we have to say which. period we want to bring the data from. In this case we are bringing the data from August. 2022. That is where we have posted some data and once we. run this process we would be able to see. All the process data as part of our processing journal.
40:07
so this will go in the processing journal, we would be able to see. that one journal has already been posted for period. and if we'll see the entry of this journal. then we would be able to see that.
40:19
For different combination of cost element and cost centers. We have multiple debit entries already been posted. That means we have brought in data.
40:28
For the source cost, cost, cost entries.
40:33
Now the next thing we have to say is how. the budget versions are being configured, right? So setup is almost. the same. We'll be defining and providing definition. of budget versions then.
40:46
When this definition is done, we'll. go to manage and in the manage one, we'll have to. provide what is the source of budget data right in. this case of source of budget data, we have to define which cost element we. are going to use and what is the data provider to data provider is going. o finance and operation and. Cost element is going to be the cost element now.
41:08
We are selecting data provider. We are bringing data from USC and. now you'll see we have to give the definition of budget. model and budget type right. So we have posted for. FY20 20 and we are using original budget and we can also define. whether you want to bring it. I'm sorry when you budget. So we are using cost. so we'll be using expense budget. Once the data provider has been complete, we can again go and process. the data. Both data and that will bring all the budget entry for.
41:35
the period that we are. Analyzing the period, again we are selecting period date of 20. and once we click OK we would be able. to see all the data of period at 2022 has been. brought in. So if you'll quickly go in the processing journal. we would be able to see that one entry is there and now in. this entry we are seeing all the data that has already. been posted and budget is being shown as negative because if. we'll do actual versus budget calculation then we can find variants.
42:04
nd what is the difference between the cost that. was budgeted and cost that actually incurred. So this is how we configure cost accounting. Ledger and this is how we bring the data into cost accounting Ledger for. further analysis. With that let me. quickly move on to the. Next section which is going to be cost control. workspace.
42:31
Got control, Workspace is a central place which provides. a centralized location for viewing and managing. processed cost data. It's reports the cost data.
42:42
Leveraging dashboards to provide insights into cost patterns. and any area of concern based on the posted. data. Once the module has been configured and the data has been processed. across period cross control workspace can be leveraged to. Validate the output of cost accounting.
43:01
Who accessed the cost accounting output across multiple? periods, right? So if you want, let's say, if you're interested in looking. at cost data across period then by using the cost control works. you would be able to do that.
43:14
Using the cost control workspace, you can also create multiple configuration. with the same cost accounting Ledger, right? That means if you want to. bring different data filtering and lens you can also define that.
43:26
It also had a capability of show and hide columns and this. is very important because sometimes you want to see more. details and sometimes you want to see less details, right? If you want to analyze. on total cost and sometimes you want to analyze on the different. component of cost. So if that's the input then you can use. the facility to show and hide columns that provides you. additional information on the dashboard and will be talking and seeing. about this.
43:50
And finally you Eugene cost control. workspace. You can also view the details and. trace the source of the cost that where. this cost is come from till the actual posted journals. that you would be interested in.
44:08
Moving on.
44:10
So now let's discuss the configuration of. cost control workspace and how it is crucial to review. the output of cost accounting module before. looking into this configuration. Let's quickly look at the sample data which we are. going to be using for this analysis, right? So. let's quickly look at the sample data so.
44:33
So the data that we are going to analyze has already been. posted in financial accounting and we have also. posted the budget data and simultaneously. we have already processed the data in the cost accounting Ledger, so cost. accounting Ledger that we are going to be working today is for. this analysis is us. Yeah.
44:54
So we have already posted our GL entry so you can. see this GN page 4 period 82020. the company is USDA and this. is a combination of main account and cost and where. where we have posted the data. So this is. the GL data and we have. Also posted the budget data for the same period for the same. main account combination, and if you'll see that this is a budget. which is posted in budget model FY20 22 and. this is the original budget and if you remember, this is what we.
45:25
have configured as part of our cost accounting Ledger as well.
45:31
And the GL data that we have posted has also been processed. and they have become cost element Jordan entry, right? So you can see all of these data that we have seen as. part of Journal. Voucher has also been processed and. been brought into the cost accounting Ledger for the period at 20. 2 right. And similarly.
45:52
The budget data that we have posted in budget register at. also been processed for the same period and that they are also now. part of our cost accounting Ledger. right. So with these data process we would be able. to configure the cost control workspace and see.
46:08
How this data can be reflected from the reporting standpoint? using cross control workspace?
46:17
Moving on.
46:21
So let's move on to cost control workspace. configuration page.
46:28
In this case you would be able to see we have few. data, few statement already created now. w we'll again go on and create.
46:38
One new configuration.
46:42
And once we cleared this new configuration.
46:45
We would be able to define data. filtering right for next step is going to be data filtering. Let's quickly click that. So here we are saying what is the cost control unit that. we want to select for this cost control workspace so in. this case we are going to use USDA Ledger and we are going. to use cost center as our cost control unit so. once that's been defined we can also go and define that. what is the cost element hierarchy because cost element hierarchy is what.
47:10
drives our reporting grid structure that we have seen. So it will quickly select serious. Be a hype. Be backlist L that would. be our cost element hierarchy. So let's select that and the next thing that we'll select is the organization. hierarchy, which is coming from the cost object hierarchy. So that is. also we are selecting and once these are all. of these are done, we will be selecting where. we are bringing the budget data from. So we are bringing the data from the.
47:38
Budget version that we have defined for USB budgets. Once all of these have been defined, this is what defined. the data filtering for.
47:47
Cost accounting workspace we have defined cost element hierarchy we have defined. our hierarchy. We have defined budget and we have defined cost control. unit. So next is assign calculation records. So this is not. something that we're covering in today's session we'll be talking about this. in more detail in the next session. Next is difficult period. The module provides flexibility to define multiple periods, right. now we have enabled only current and year to date but we.
48:09
can also defaultly enable period period period end.
48:13
Year to date. And then we'll talk about.
48:18
But control works. We will be able to see how we. can define these hierarchy. On the real time basis, if they need. right, that means directly in the dashboard we are having a option. to define.
48:31
Different periods we'll be seeing that second one is. columns to display. So right now if you'll see we have not done any analysis on. fixed and variable costs. We'll turn that off and we'll. also turn fixed and variable costs. We'll just keep total cost because that is what? we have processed till now. Once that's been done. the final setup for the cost control workspace is to define the budget. right. So on the last tab, you are able to define budget.
48:54
define budget variance and you can also define various threshold. if that applies for.
49:00
Budget variance, right? So we are keeping this as it is. and with this setup now. we would be able to go back to first control workspace. and see how.
49:12
The data that we have already processed looks like in cost. control workspace.
49:17
Let's click only go on to cost control output.
49:21
We have all the statement and right now we have configured USB. under cost control. We'll select that statement right? So if we'll click on that statement. we would be able to see.
49:33
The cost? OK, let's quickly move on and define which organization are. collecting. So we have selected the cost object dimension hierarchy and. that will give us the grid that we have defined. which is coming from serious piece slash L. right now we don't see any data here because we are looking at. data for three 2023, which we have. not posted any data too. So let's quickly move on to period 8. 022. And once we do that, we would. be able to see.
50:04
The data for the posted data for financial entry has been. started appearing, so you'll see the total cost is 201. 47747 and the budgeted cost for. the period was 201582 and we have. a deficit of minus 165 in. budget versus actual. Right now, again using the hierarchy we can. go through the lower nodes if there's a need. So if let's quickly. see.
50:31
That if we want to analyze cost and. see that. What is the cost that is going to be there for CIO? So if we'll click on that, we'll be able to see that the. cost for CIO is going to be 30,750 and. that is coming from personal cost and expenses slide.
50:50
So all of these costs are coming from the posted financial entry. and now the cost have been filtered based on all the cost. object, which is therefore Tio. Similarly we can go. back and define, let's say we don't want to see the budget data. we can remove budget and enable previous periods right now we'll. see budget data has gone and only previous period in current. period is showing and we have not posted anything previous previous period.
51:12
and that is why it is coming out to be blank right now. Let's say we want to see where the data is coming from, then we. can click on view details and that will take us all the relevant entries. which is making the total of 30,000. up. And now let's say we are also interested. to know what is the source for these. e entries right then we can click on the cost entries and that will? llow us to take us to source control. That means where the source where, what is the source?
51:42
f these detail which GL is being used?
51:47
To bring these entries so if you click on source entry. We would be able to see.
51:55
We would be able to see the poster journal voucher which has. brought in this data in the cost accounting. So right now if you'll. see this was a data posted on 17th of. August and this is coming from this. particular journal browser and that is.
52:11
That is how the cost control workspace helps. analyze and review the output of cost accounting based on the. actual financially posted data.
52:22
With this, let me hand it over to Alejandra to go through. the recommendation and resources for this tech. Talk over. to you, alandra.
52:32
Thanks Amar.
52:36
So here we present some recommendations gathered to get. started with the configuration for your cost accounting mode.
52:45
First, identify relevant cost control units. Try. to define one to one relationship between financial dimension. and cost. Accounting letter for cost control this. is if for example cost needs to be analyzed. against more than One Financial dimension plan. more than one cost accounting lecture.
53:07
Define dimension hierarchies. They are important. for reporting and policy definition while defining this. it's important to consider the organization structure. the cost structure and the cost accounting policy needs.
53:21
You can always create multiple hierarchies against each. coastal containing dimension for different purposes. such as requirements, overhead calculation, etcetera.
53:32
Bring the cost accounting only the data which will be. used for cost accounting. You don't need to bring other financial. data if not needed. Just ran this and filters available in the letter. to filter relevant datasets.
53:47
And finally define how you want to see the data in. your cost control workspace. You can just different dimensions. hierarchies for it.
54:02
And here we have more links to learn. more about cost accounting.
54:08
And now we can move to the question.
54:16
So thank you. Thank you for the. questions we have had. A multiple questions about the financial. tax, which which is a new feature in dynamics. 365. And we don't have yet a plan to. incorporate financial tasks in cost accounting. In the road map, but definitely we are considering. that as a feedback.
54:43
UM.
54:47
And yeah.
54:49
Bye. So I yes as you. highlighted, I don't think financial tag is part of the cost. accounting but.
54:58
We can check on the road map and see to it that if there's an update. and we can define that. I think we have few minutes. You can take a few more questions. So one that I see is can an operating unit be a? cost element without being in financial dimension in? accounting the structure for? The company? No. So that is that is. For. So then, whenever you're talking about.
55:26
Of financial dimension, right, that eventually gets translated into. post object, right and that? is where anything which is not either a main account and finance. or a financial dimension, you would not be able to. bring that in using the data connectors of.
55:44
Data connectors. All three nines and operation so that I would. be assuming that if it is not a financial dimension, you would not be bringing that. data in as part of your cost object. But that's one thing and.
55:58
Next that I see is.
56:01
If I use standard CrossFit multiple site, the cost. will be calculated as if a standard will charge by site. so I'm not sure. On the question, but Mohammed, if. re asking about if you use a standard cost.
56:17
How the can it be still used in the cost accounting? So my answer would be yes because as. long as it's a posted financial data right, you would be able. to bring that up as part of the cost accounting module. right? So that is what it would be.
56:37
So there there's also a question that how can I? create a statistical dimension for production R so you can. do that so and we'll be talking maybe about. that in the next TechTalk. But if you're really interested, we. have a we have a doc page for that. hich talks about that right that means.
56:57
This dimension statical dimension, right? Either you can bring it from. outside, right? And the majors. You can also derive. from finance and operation right? So.
57:07
The so there's a page which talks about how. you can bring that data up maybe. when we are covering the. next step talk, we'll update that as part of our resource and recommendation. so that you can look at it and we'll also talk about that. in the brief. So I would expect you. to join the next step talk so that we can show and explain. that yeah. OK. Yeah. And there are a couple of. questions about like if they could. e can just only actual. In the for cost accounting and. not bringing budget.
57:45
Yeah. Entries. So we. Yeah, go ahead.
57:50
So that you can definitely do. budget entries that we have defined, right? It is all. about if you have interest of doing budget versus actual. you can do that. If there's no need to do budget versus actual. then you don't have to configure budget version and you can just. leave it alone and you don't have to define that.
58:09
You want to add anything in under. No, that's fine. That's good.
58:15
Do we have a power BI based cost accounting workspace? available on the road map?
58:22
No, but it is already there. It is. It is already. there. Power BI. Would it just that we. are not covering as part of the plan TechTalk series and. if there's a really huge interest, then we may think. about showing. But you can find that information on. our documentation page which talks about how power BI. can be leveraged for. With the unlisted that you would have already done.
58:50
Then we have a question that. Can we see the result? Of multiple periods in the cost controlled workspace.
59:00
Yes. So we did talk about that. There's two ways that you. can do. You can define the periods like current period. previous period and year to date that will give. you in one snapshot all of the defined period or. you can fish the period using the drop down of period. and that would also give you options to look at. data in different periods.
59:22
I think, yeah, I think that was the. last question that we can take. So we are rubbing. up and for the rest of the questions we can.
59:35
Transfer and added to our material that we. will be publishing. Yep, that would be great.
59:43
Over to your team to wrap up. Stop.
59:46
Thank you, Alejandro.
59:49
I've posted a link to a short survey in the Q&A. panel. We'd love to hear your feedback on today's session and. here what you'd like to see in future events. Thank you. for your participation as a reminder. the recording of today's session will be made available on. the TechTalks Community Dynamics page within the coming weeks. I'd like to extend a big thank you to our presenters. today, Alejandro Cabrales and Amar Kumar and. to you, our audience, for joining us. We hope you have a.
1:00:19
great rest of the day ahead.
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