New Overhead Cost Model in SAP Delivers 99.9% Faster Monthly Close

We recently wrapped up a project for a customer that was dissatisfied with its process for assessments (allocations) in SAP, which was slow, complicated, and, to put it bluntly, a real computing resource hog. In fact, the legacy assessment cycles took about 36 hours to run, so there was great room for improvement.

HPC proposed to implement a more efficient overhead-centric process that would bring the customer's accounting into line with best practices. Our model was designed to meet all reporting requirements by utilizing costing sheets instead of assessments, thereby simplifying current processes and speeding up the month-end close.

During the course of the project, we advised the customer on substitute forms of CO allocations such as overheads for PTO, benefits, payroll taxes, supervision and engineering, corporate A&G, and stores expenses. We also implemented the conversions necessary to change master data, such as order numbers, to include new costing sheets.

The customer now has fixed overhead rates in place for 2014, and overhead cost pools for supervision, customer services and administration. A new Stores Expense burden is applied to material issues from stock.

Overhead applied to PM orders is based on a composite rate of direct labor, and the customer's job estimating software uses that rate to calculate overhead on capital work orders. All orders now get a fair and equitable proportion of overhead, and overhead is applied in a far more timely manner to work orders. Accounting can run overheads after each payroll process is completed in CATS, to give project managers the most up-to-date view of job costs.

What about the impact on the month-end close? Running January showed a dramatic improvement: the assessment process that used to take 36 hours now finishes in just 30 seconds. And the new overheads run for only 10 minutes. Both human and computing resources are freed up considerably.

Stay tuned for a complete case study next month.

Easy cost adjustments in SAP - video demo

The typical process for adjusting costs in SAP—for example, correcting mischarged orders—can be time-consuming, error-prone, and overly reliant on systems outside your ERP.

In contrast, the HPC Journal Entry Transfer Solution (JETS) delivers fast, high integrity, and totally transparent cost adjustments directly in SAP. JETS is a NetWeaver-based application that integrates seamlessly with the SAP GUI you already know. It gives you total control over both primary and secondary cost adjustments, and creates a complete audit trail for future reference.

Watch the JETS demo video below to see an example of complex cost adjustments made simple in SAP:



Learn more about HPC JETS and contact us for a live demonstration.

SAP budgeting solution Allevo from Kern AG

While at the Controlling 2013 conference, we enjoyed speaking with our neighboring exhibitor Kern AG. Adrian Rochofski and Alexandra Stegmann showed us how their Allevo budgeting solution for SAP integrates Excel and SAP to optimize the budgeting process in SAP. Allevo reduces the complexity of planning, especially for users new to SAP, while taking full advantage of SAP's sophistication. Allevo can shorten the time required to budget, reduce staff workload, and increase data quality, enabling controllers and business owners to invest more time in analysis instead of data management (a common theme with our own JETS cost adjustment solution). We'd encourage all SAP users interested in improving their planning processes to take a look at Allevo.

Controlling 2013 - HPC JETS demonstrations

We've been at ERP Corp's Controlling 2013 conference in San Diego the last few days, and are blown away by the experience, knowledge, and engagement level of the attendees. Everyone here truly knows SAP Financials well, and the conversations demonstrate a much higher signal-to-noise ratio than at other events we've attended. Controlling 2013 has offered what we'd hope to see from any professional conference: substance, expertise, and collegial exchange. Even better, John, Alice, and the rest of the ERP Corp team have been exemplary hosts.

During Controlling 2013, we've demonstrated the HPC Journal Entry Transfer Solution (JETS) live, with practical examples of adjusting cost objects in SAP. (Watch an online video of how HPC JETS can adjust both primary and secondary costs.) Everyone gets it, nodding their heads in appreciation, and most recognize how it could benefit their organizations. We even had an opportunity to present JETS to SAP's Janet Salmon, perhaps the most definitive source of SAP CO product knowledge.

HPC CEO Jerry Cavalieri walks SAP's Janet Salmon through the JETS cost adjustment solution.

New project: work management, overheads, BCS reports, and HPC JETS upgrade

One of our latest customer projects is to strengthen the integration between work management functions in the SAP Plant Maintenance (PM) and Controlling (CO) modules with the Financials (FI) and FERC modules by automating the FERC indicator assignment to work orders of various types. We're also designing and implementing an overhead-centric process for allocations that simplifies legacy processes and speeds up the month-end close, and developing automated Budget Control System (BCS) reports that eliminate manual data manipulation outside of SAP. And last but not least, we're upgrading the customer's HPC Journal Entry Transfer Solution (JETS) software to version 2.0, which adds control over secondary costs to JETS' already robust functionality for simple, fast cost adjustments in SAP. Watch a video demo of HPC JETS v2.0.

SAP BPC Consultant (v10 Microsoft SQL-based)

We are seeking an experienced Microsoft professional for a 10- to 12-week, on-site BusinessObjects Planning and Consolidation (BPC) project for our customer in San Francisco. The BPC functional consultant will be responsible for gathering business requirements, blueprinting the system design, and configuring system functionality for capital projects, long-range forecasting, and refinance analysis. Proven experience with BPC v10, a strong understanding of finance and accounting, and a location in/near San Francisco are required. Learn about the BPC Consultant qualifications and how to apply on our Web site.

SAP Controlling Conference - ERP Corp's "Controlling 2013"

We admit it, our inner accounting geek is just thrilled: HPC America is exhibiting at the Controlling 2013 conference hosted by ERP Corp on September 22-25 in San Diego, CA.

We're looking forward to sharing our experience and exchanging ideas with other SAP finance professionals about a variety of topics, from the nuances of overhead accounting to new developments in SAP reporting.

ERP Corp has lined up many customers to speak about their real-world SAP controlling experience, including case studies from Deere & Company and Johnson & Johnson, plus practical, actionable insights into HANA and CO from SAP's own Janet Salmon. Check out the speaker list and conference agenda.

Please contact us if you'd like to meet at Controlling 2013. We look forward to seeing you in San Diego!