Cost Analysis & Reporting Solutions
A more sophisticated version of P&L reporting, Cost Analysis delivers an opportunity to provide your enterprise with accurate and consistent cost information, which is essential for effective cost control and a wide variety of operational and financial decision-making.
Most complex organizations will find a Cost Analysis application necessary to make up for the deficiencies and distortions found in their General Ledger. A GL typically cannot capture the required number of attributes within the journal entry to correctly allocate every cost, nor does every cost correlate well with a specific revenue stream. As a result, a Cost Analysis application commonly allocates overhead, corporate and other unallocated cost buckets in order to match costs with specific revenue, and thereby provide an accurate view of margin and profitability.
In most cases, the business rules required to perform these cost allocations are complex, numerous and iterative, and the information technology required to implement them must be flexible and dynamic. Profisee can confidently provide the necessary tools, algorithms and design practices to meet the challenge.
The output of a Cost Analysis application is often used to drive Profitability Management applications, or a more comprehensive Performance Scorecard or Balanced Scorecard application that derives higher-order business metrics and indicators of success.
Moving beyond cost allocations, many organizations now prefer to use an Activity Based Costing (ABC) philosophy and related accounting techniques to discretely allocate costs to underlying Cost Objects such as Products and Customers. Profisee is well-versed in both traditional cost accounting and ABC. The Profisee team has been responsible for some of the largest ABC initiatives deployed in the U.S.