It is not allowed to create a cost center for less than two employees
Rule 2
An employee is assigned to one cost center only
Rule 3
Threshold of minimum amount per year of primary expense.
Recommendation: minimize the number of CC allocation
For Production costs: allocation between organizational CC and another organizational CC
For non Production costs: allocation from organizational CC to reporting CC
Exception
Utilities
Insurance (IAS 19)
R&I: allocation from CC to WBS
Intercos: from organizational CC to organizational CC other company
General rule:
All type of expenses - different than Manufacturing Costs (Indirect/Direct) and R&I - go directly to BFC (at different reporting cost center) and to only 1 BFC heading.
General rule:
“No pricing” rule: allocations between organizational cost center, within the same legal entity (same GBU normally, but could be also between 2 GBUs) should be done at cost.
General rule:
Payroll expenses shouldn’t be posted to technical cost center if HR/Payroll system is integrated.
An employee is assigned to only one cost center
General rule: A minimum level of detail is required for assessment to reporting cost center:
For gross margin => Cost center reporting at “PIF” Level (see codification below)
Below gross margin => Cost center reporting at “Division” level (see codification below)
Below EBIT => Cost center reporting at “Company” level (see codification below)
General rules:
1. For GBU cross charge
Change the cycle usage: evolution from actual amounts to planned amount
Objective: anticipate the launch of cycles (from D2 to D-1) and reduce problems in D4
Create and standard cost center for Cross charge (in order to align to method of CBS)
2. For CBS
Create a specific Cost Section (160) for SBS invoicing
Technical Cost Center can be used for the following cases:
Use case 1: to centralize primary costs for corporate needs (e.g.: Insurance, IAS 19…)
Use case 2: to post costs not directly linked to the organizational structure (e.g.: other non recurring expenses)
Use case 3: to collect the result of income miscellaneous (e.g.: sales of scrap…)
Use case 4: if the organization cost is not defined in the Cost Section narrative
Reminder: in all cases, the request has to be approved by the Central Costing Expert after approved the request by GBU.
Definition: “Statistical key figures” provide information on non-monetary data such as the number of employees, number of machines, capacity usage, market information…and can be used for internal cost allocations.
Recommendation: minimize the usage of SKF or avoid it (if possible)
2 conditions are identified to use the “Statistical key figures”
