Cost Item 

Definition

An object on which an amount or a number is stored that you would like to include in personnel cost planning.

Structure

The system distinguishes between the following cost items:

Direct Cost Item

Cost item provided via data collection. Direct cost items are composed of an amount or a quantity.

An employee’s basic salary is a direct cost item with an amount.

An employee’s overtime hours are a direct cost item with a quantity.

The system treats cost items differently during data collection, the cost planning run, and depending on whether they have an amount or a quantity.

·        Cost items that are composed of an amount are included with the amount in the data basis. They are also included with the same amount during the cost planning run.

·        Cost items that are composed of a quantity are included as a number in the data basis. The system treats these cost items as follows during the cost planning run:

¡        If they are cost elements, the system calculates an amount from the number. It valuates the cost items according to the Customizing settings you defined for the planning scenario.

¡        If they are statistical key figures, the system considers them as a number.

Base Cost Item

A cost item that is derived from a dependent cost item. Base cost items can be direct or dependent cost items.

The direct cost item Wages and Salaries can be the base cost item for the dependent cost items Salary Increase and Employer Expense Social Insurance. Similarly, the dependent cost item Salary Increase can be the base cost item for the dependent cost item Employer Expense Social Insurance.

Dependent Cost Item

A cost item that the system derives from a base cost item. In Customizing, you define from which base cost items the system is to generate which dependent cost items for each planning context. The system valuates the dependent cost items during the cost planning run according to the Customizing settings you defined for the planning scenario. You valuate dependent cost items using the percentage value of the base cost item from which it was derived.

You can have the dependent cost item Employer Expense Social Insurance generated from the base cost item Wages and Salaries. You can have the cost item Employer Expense Social Insurance valuated using a certain percentage of the amount for the cost item Wages and Salaries.

In the planning scenario, you have defined a specific percentage salary increase. During the planning run, the system calculates for each employee the appropriate additional amount for the salary increase and includes this amount in the plan as a dependent cost item.

Additional Cost Item

A cost item that is independent from all other cost items.

For example, a bonus granted to an employee irrespective of his or her basic salary.

In Customizing, you define for each planning context the additional cost items that the system is to generate in a cost planning run. The system valuates the additional cost items during the cost planning run according to the Customizing settings you defined for the planning scenario. You valuate additional cost items with a fixed amount or in the case of statistical key figures with a fixed number.

Integration

The following figure illustrates the indirect assignment of wage types to cost items and from cost items to cost elements in Controlling:

You first define the cost item type in Customizing for Personnel Cost Planning and Simulation. You thereby specify whether the cost item is relevant for posting.

Cost Items Relevant for Posting

·        You uniquely assign cost items relevant for posting of type Cost Element to a symbolic account. At the same time, you make the following assignments:

¡        Assignment of wage types to cost item

You use the symbolic account to assign one or more wage types to a cost item. You thereby define that the system transfers the amounts from this wage type or these wage types to the cost item during data collection.

¡        Assignment of cost item to cost elements

You use the symbolic account to assign a cost item to one or more G/L accounts in Financial Accounting. As it is an expense account, a primary cost element is assigned to the G/L account in Controlling. You thereby specify the cost element(s) to which THE SYSTEM transfers the individual cost items.

Feature HCP03 (Cost Object Grouping for Account Determination) enables you to group cost objects for account determination in Accounting. This allows you to define that the same cost item, depending on the properties of the relevant cost object to which it belongs, is to be transferred to different cost elements.

Payroll also uses symbolic accounts. It thereby defines which wage types are to be posted to which G/L accounts and cost elements in Accounting. If you implement Payroll and have already made the Customizing settings for posting payroll results to Accounting, you can use these settings for Personnel Cost Planning and Simulation. You only need to create additional symbolic accounts for Personnel Cost Planning and Simulation if explicitly required.

If you want to change existing symbolic accounts for Personnel Cost Planning and Simulation, you should discuss any changes you want to make with the employees responsible for posting payroll results to Accounting.

·        You uniquely assign cost items relevant for posting of type Statistical Key Figure to a statistical key figure for each controlling area.

Cost Items Not Relevant for Posting

Depending on how you want to use a cost item that is not relevant for posting, you decide whether to assign it to a symbolic account. If you want to assign wage types to a cost item you always need a symbolic account. This is because you cannot assign wage types to the cost item directly. This is regardless of whether you want to transfer the cost item to Controlling.

In the following cases, you do not require a symbolic account:

·        You only want to use the cost item during the cost planning run to form subtotals.

·        You collect costs in data collection that are not stored in wage types, for example, training costs.