Cost and Revenue Planning

Purpose

Detailed planning in the customer quotation and in the sales order is made possible by viewing the cost planning and sales price determination separately.

If you want to assign services to a subcontractor, select these external services and create purchasing documents for them. You can then copy the prices from the subcontractor quotations for pricing in the customer quotation.

Some of the master data (material masters, stored wage costs) can be used when the required sources and quantities for the costing of services are processed. You can also create requests for quotation for these materials.

Target specifications for the grouping of alternatives can be determined in the customer quotation and sales orders. The transfer of target specifications to the project links the business and technical areas, and thus supports project controlling in the execution phase.

Supplements are also managed and can be costed (see For more information, see Supplement ).

Process Flow

You can carry out cost planning and sales price determination in the customer quotation and sales order.

Note Note

If you create the sales order with reference to the customer quotation, you can copy the conditions and costing items and therefore minimize the time and effort involved in costing the order. To use this option, you must have previously set the Copy services indicator. For more information, see Copying Control for Sales and Distribution Documents .

End of the note.

Below is a description of the steps involved in cost planning and sales price determination:

  1. You receive an inquiry or take part in a bid invitation.

    Example Example

    Consulting engineers plan the proprietor's construction work. The resulting BOS can be requested for quotation creation.

    Another option consists of the proprietor creating a functional description of the services involved in which the construction task (function descriptions, minimum qualities, and so on) is described. In this case, the contractor creates a bill of services (BOS).

    End of the example.

    You first import the bill of services into the system (see Interfaces for Sales Documents With BOS ) or set it up manually (see Creating and Processing a BOS ).

    Service lines are often added. This simplifies costing and provides visibility. Additional service lines can be contingency lines or alternative lines (see Line Attributes ).

  2. Quotations from different subcontractors can be collected in order to create the customer quotation. Subcontractor groups allow you to group service lines in the sales document and transfer them to a purchasing document. (See Service Lines )

    You enter subcontractor groups in the service lines that are to be assigned to subcontractors. These service lines are in the customer BOS.

    Note Note

    You define subcontractor groups in Customizing for Sales and Distribution under Start of the navigation path Bill of Services Next navigation step Subcontractor BOS Next navigation step Define Subcontractor Group. End of the navigation path

    End of the note.

    Caution Caution

    The default setting in the standard system defines that subcontractor group 0000 signifies internal services. You cannot assign service lines in this subcontractor group externally. For that reason, you cannot copy them to a purchasing document.

    End of the caution.

    Example Example

    You can use purchasing groups or maintenance groups as grouping or selection criteria. You define the following subcontractor groups for maintenance groups:

    End of the example.

    0001 Dry construction

    0002 Heating

    0003 Electrical work

  3. You create bills of services in order to obtain subcontractor quotations . To do this, copy the service lines specified for external assignment using service selection form a customer BOS to a subcontractor BOS. When you copy the lines, you can define whether the total quantity or a partial quantity is queried.

    The system centers a reference for each service line copied from the customer BOS. This reference information enables quantity checks and price transfers.

    Example Example

    To create a quotation for a construction proprietor, you request quotations from subcontractors for electrical work. To do this you create a RFQ with SC BOS, assigning all of the services from the customer BOS to subcontractor group 0003 (electrical work).

    End of the example.

  4. On the basis of the subcontractor bills of services, quotations for the external services are requested from the subcontractors. Some subcontractors may be requested just to provide quotations for labor or material in the SC BOS. This assumes that the materials are purchased by the contractor and provided to the subcontractor for the construction work.

    You implement the purchasing process using the component External Services Management (MM-SRV) .

    You can compare the prices of different quotations related to a particular bid using the price comparison list . The quotations are listed by items with the most reasonable price first. For more information about the price comparison list, see Comparing Quotations .

  5. The system helps you to copy the prices from the subcontractor quotation to the customer quotation . You call the price transfer in the subcontractor services report.

    Note Note

    You determine which pricing elements are transferred from a subcontractor quotation to a customer quotation is controlled using the assignment of condition types for MM services to condition types for SD services. You can make the required settings in Customizing for Sales and Distribution by choosing Start of the navigation path Bill of Services Next navigation step Subcontractor BOS Next navigation step Define Copying Rule for Condition Type. End of the navigation path

    For example, if you only want to copy material costs, and you do not want to take into account wage costs, you only assign the relevant material conditions. When the system automatically transfers the prices, it only copies these pricing elements.

    End of the note.

    Caution Caution

    Automatic transfer of prices is not possible if you have created several purchasing document chains (that is, if you have referred to the same service line in several purchase requisitions or purchase orders).

    End of the caution.

  6. The required resources (material, wage, external labor, equipment, and so on) and quantities (number of hours, units, meters, and so on) can be determined on the costing item level for each service line (see Cost Planning and Processing of Costing Models and Assignment of Attributes ).

    • If master data exists for the planned resources, the budgeted costs saved in this master data are automatically passed to the costing item level:

      • Material master

      • Saved labor costs (service types, cost centers)

      • Service master conditions

      • Purchasing information record

    • If costing items exist that cannot be provided with base costs from master data or vendor and subcontractor quotations, estimate the base costs and then enter them manually (see Cost Planning ).

    • You create inquiries for external services and materials (see Triggering of Execution Services ). The quotations from vendors and subcontractors are received, entered in Purchasing and then evaluated. To do this, use the component External Services (MM-SRV) . You copy the quotation prices manually as budgeted cost for the base costs for the external assignment of specific costing items.

  7. The overhead costs for a BOS are calculated separately so that they can be distributed among the individual costing items of the service lines (see: Calculating Overhead Costs ).

    Depending on the specific conditions of the project, the base costs and base quantities can be corrected by additions and deductions in order to determine the basic costs and quantities (see: Calculating Service Lines and Calculating Additions and Deductions and Distributing Assessments ).

    The system determines the basic costs and quantities from the base costs and base quantities, plus any additions, deductions and assessments.

    The basic costs are transferred to the service line to determine the sales price. The system transfers the basic costs of the costing items to the conditions in the costing sheet for the service line (see: Transferring Costs to Service Conditions ).

    The sales price is determined by the additions or deductions made to the service lines by the general business costs and sales margin.

    The basic sales price is derived from the hierarchical cumulation of all the sales prices for the service lines. You can reduce or increase this manually on the level of the document item level (See also: Sales Price Determination ).

    Further additions and deductions to the basic costs and quantities result in the target costs and target quantities. (see also: Calculating Service Lines and Calculating Additions and Deductions and Distributing Assessments ).

    The target costs and target quantities are those that the contractor endeavors to meet in realizing the work in the project. You can use these to form standard values for the execution of the project, for example, for the construction site manager.

    Caution Caution

    The determination of the target costs is not the same as the actual target price calculation.

    End of the caution.

    You can transfer the target costs and target quantities to the Project System . They act as a basis for project planning. (See also: Transferring Costs to the Project ).

    The costing report documents the costing results.