This chapter describes how you can set up Service Costing functionality to capture costs and profits for individual service requests. Service Costing allows organizations to monitor and track the costs and profits for the services provided to their customers. The cost information for the material, labor, and expenses debriefed during the resolution of a service request is captured. Users can generate a Profit Margin report that displays the costs, charges, and the related profit margin for each service request.
This chapter covers the following topics:
The costing method is defined at the Inventory Organization level. Oracle Cost Management supports four costing methods - Standard Costing, Average Costing, FIFO Costing, and LIFO Costing. Service applications support these methods for material items. For labor and expense items only Standard cost can be applied.
Navigate to Inventory, Setup: Organizations, Organizations, Inventory Organization, Inventory Information, to set up the costing method.
For details on setting up costing methods, refer to Costing Methods in Oracle Cost Management User's Guide.
Navigate to Inventory, Items: Master Items, Costing Tab.
Select the Costing Enabled check box.
Select the Inventory Asset Value check box.
Navigate to Inventory, Items: Master Items, Service Tab.
Select the Enable Service Billing check box, and choose Material as the billing type, to enable charges for material items.
To setup labor items:
Navigate to Inventory, Items: Master Items, Costing Tab.
Select the Costing Enabled and Inventory Asset Value check boxes.
Navigate to Inventory, Items: Master Items, Service Tab.
Select the Enable Service Billing check box and choose Labor as the billing type, to enable charges for labor items.
To setup expense items:
Navigate to Inventory, Items: Master Items, Costing Tab.
Select the Costing Enabled and Inventory Asset Value check boxes.
Navigate to Inventory, Items: Master Items, Service Tab.
Select the Enable Service Billing check box and choose Expense as the billing type, to enable charges for expense items.
For more details on inventory item attributes, refer to Item Attributes chapter in the Oracle Inventory User’s Guide.
Under the Service responsibility, navigate to Inventory, Items: Master Items, Tools, Item Costs.
In the Cost Element field, enter Material, Resource or Overhead, for material, labor, or expense items, respectively. As these cost elements are seeded in the Costing application, you cannot define additional elements.
For more details on how to define cost items, refer to Item Costing chapter in the Oracle Cost Management User’s Guide.
Service Activity Codes (SACs) determine if cost and charge records will be created or not.
Navigate to Service> Setup: Charges > Service Activities and Billing Types.
Select the Create Charge check box to enable creation of charge records.
Select the Create Cost check box to generate cost records for the transactions.
Install Oracle XML Publisher to implement the XML Publisher report. Associate the XML Publisher Administrator responsibility to the user.
The profile option Service: Default Inventory Item for Labor Transactions is used to default the inventory item and create cost records for those labor transactions that are created with no inventory item on the Debrief UI. This value is used when Create Cost in the SAC is Yes and Create Charge is No.
To set up the profile option, you need to select a value from the LOV. It displays all the Inventory Items that have the billing type as labor, and that are assigned to the Inventory Organization defined in the profile option Service: Inventory Validation Organization.