5Creating and Using Cost Lists
Creating and Using Cost Lists
This chapter describes how to create and use cost lists, and covers the following topics:
About Cost Lists
A cost list is a set of costs for products or services. You can attach a cost list to either a rate list or a price list to determine the profit margin.
There are four cost methods that you can use to determine the cost of a product or service:
Standard Cost. This is a predetermined operating cost that is compared with the actual cost to measure the performance of a given department or operation.
Last Cost. This is a cost metric used in the LIFO (Last-In, First Out) costing method. LIFO calculates cost by assuming the last goods purchased are the first goods sold, so the ending inventory consists of the earliest goods purchased.
Next Cost. This is a costing method that allows the user to maintain the cost manually.
Average Cost. This is a costing method that calculates product cost as the average (arithmetic mean) of all the purchase costs of an inventoried product.
You calculate these values outside of the Siebel application, and then you can enter all four of these costs for each product or service that is a line item in the cost list. You use the Cost List record to choose which of these cost methods is used for all the line items in the list.
You can attach the same cost list to multiple price lists. For example, you may have two price lists with different prices for the same products, one with the prices for customers and the other with the prices for resellers. Although the products may have the same cost, regardless of the price you charge for them, you can attach the same cost list to both of these price lists.
Process of Creating Cost Lists
To create costs lists, perform the following tasks:
Creating the Price List or Rate List the Cost List Will Reference
This task is as step in Process of Creating Cost Lists.
As a prerequisite for creating a cost list, create the price list or the rate list with which the cost list will be associated. The cost list will include the cost of products included in the price list or the hourly cost of the services included in the rate list. For more information about creating price lists, see Creating and Assigning Price Lists For more information about creating rate lists, see Creating and Assigning Rate Lists
Creating the Cost List Record
This task is as step in Process of Creating Cost Lists.
The cost list record includes general information about the cost list as a whole, such as its name, the organizations that can use it, and its cost method.
To create the cost list record
Navigate to the Administration - Pricing screen, then Cost Lists view.
In the Cost Lists list, add a new record and complete the necessary fields, as described in the following table.
Field Comments Cost List
Enter a unique name for this cost list. If you have many cost lists, then it is important to use meaningful names and a consistent naming convention for them all.
Description
Enter a description of this cost list for your own use.
Effective From
Enter the date and time when this cost list will become effective. By default, the application assigns the current system date and time when you first create the Cost List record.
Effective To
Enter the date and time when this cost list will become ineffective. After this time, Siebel applications will not use this cost list.
Cost Method
Select one of the four cost methods: Standard, Average, Next, or Last. These cost methods are described in About Cost Lists.
Created By
This field displays the user name of the person creating this record.
Created
This field displays the date and time when the record was created.
Organization
Select the organizations that will use this cost list.
Updated By
This field displays the user name of the last person who updated this record.
Updated
This field displays the date and time when the record was last updated.
Creating the Cost List Line Item Records
This task is as step in Process of Creating Cost Lists.
You must add a line item to the cost list for each product or service in the cost list. The cost list line item has specific information about the cost of that product or service.
You can enter four costs for each product, using the four cost methods described in About Cost Lists. The cost method used depends on the cost method you choose in the Cost List record.
This record is used only for the direct cost you pay for the product. Indirect costs associated with the product are entered later.
To create a cost list line item
Navigate to the Administration - Pricing screen, then Cost Lists view.
In the Cost Lists list, select the cost list to which you want to add a line item.
Click the Cost List Line Items view tab.
In the Cost List Line Items list, click New.
The Add Internal Products dialog box appears.
In the Add Internal Products dialog box, select the product you want to add to the price list, and click Add.
Complete the fields in the Cost List Line Item record, as described in the following table.
Field Comments Product
The name of the product or service that you selected from the Add Products dialog box is entered here.
Part #
The part number of the product or service that you selected from the Add Products dialog box is entered here. This number uniquely identifies the product or service.
Standard Cost
Enter the standard cost, as described in About Cost Lists.
Last Cost
Enter the last cost, as described in About Cost Lists.
Next Cost
Enter the next cost, as described in About Cost Lists.
Average Cost
Enter the average cost, as described in About Cost Lists.
Start Date and End Date
If the line item has different effective dates from the cost list, then enter the start date when the costing becomes effective and the end date when it is no longer effective. These fields work in the same way as the start and end date fields of price list line items, as described in Giving a Product Multiple Prices with Different Effective Dates.
Entering the Indirect Costs
This task is as step in Process of Creating Cost Lists.
After entering the direct cost of the product, you can also enter indirect costs associated with the product, such as your cost of ordering products, receiving products, and shipping products to customers. These indirect costs apply to all the products in the cost list. Enter an average cost for a unit for all your products.
To enter indirect costs
Navigate to the Administration - Pricing screen, then Cost Lists view.
In the Cost Lists list, select the cost list to which you want to add indirect costs.
Click the Cost List Indirect Costs view tab.
In the Cost List Indirect Costs Items list, click New.
Complete the fields in the Cost List Indirect Costs record, as described in the following table, and continue to add these records until you have entered all indirect costs.
Field Comments Expense Object
Select the type of indirect cost, such as shipment, receipt, or demonstration.
Cost Per Unit
Enter the cost for each unit of this indirect cost, spreading the total indirect cost across all the products or services in the cost list.
Comments
Enter a comment for your own use.
Associating the Cost List with a Price List or Rate List
This task is as step in Process of Creating Cost Lists.
After creating the cost list, you can associate it with either a price list or a rate list. You can associate the same cost list with more than one price list or rate list.
Associating a Cost List with a Price List
Use the following procedure to associate a cost list with a price list.
To associate a cost list with a price list
Navigate to the Administration - Pricing screen, then Price Lists view.
In the Price Lists list, select the price list with which you want to associate the cost list.
In the More Info form, go to the Cost List field and select the cost list.
Associating a Cost List with a Rate List
Use the following procedure to associate a cost list with a rate list.
To associate a cost list with a rate list
Navigate to the Administration - Pricing screen, then Rate Lists view.
In the Rate Lists list, select the rate list with which you want to associate the cost list.
In the More Info form, go to the Cost List field and select the cost list.
Updating a Price List’s Costs
This task is as step in Process of Creating Cost Lists.
If the cost list is associated with a price list, then you must update the cost for that price list to make the new cost list take effect.
This is not necessary if the cost list is associated with a rate list.
To update a price list’s costs
Navigate to Administration - Pricing screen, then Price Lists view.
In the Price Lists list, select the price list whose cost you want to update.
In the Price Lists list, from the applet level menu, select Update Cost from the menu.
Viewing the Product Cost and Margin
This task is as step in Process of Creating Cost Lists.
Now that cost lists have been set up and associated with a price list or rate list, any user can view the cost and the profit margin of products on that price list. The margin is displayed as a percentage.
Viewing a Product Cost and Margin in a Price List
Use the following procedure to view a product cost and margin in a price list.
To view a product cost and margin in a price list
Navigate to the Administration - Pricing screen, then Price Lists view.
In the Price Lists list, select the price list for the product whose cost you want to view.
Click the Price List Line Items view tab.
In the Price List Line Items list, select the product whose cost you want to view.
Navigate down to view the Price List Line Item Detail form.
If necessary, click the Show More button in the Price List Line Item Detail form.
The product cost is in the Cost field and the profit margin is in the % Margin field of the Price List Line Item Detail form.
Viewing a Product Cost and Margin in a Rate List
Use the following procedure to view a product cost and margin in a rate list.
To view a product cost and margin in a rate list
Navigate to the Administration - Pricing screen, then Rate Lists view.
In the Rate Lists list, select the rate list for the product whose cost you want to view.
Click the Rate List Line Items view tab.
In the Rate List Line Items list, select the product whose cost you want to view.
Using Asset Mapping to Value Assets
When you use asset mapping, an asset is valued as a percentage of its value on the cost list. The percentage can be based on the current condition of the asset. For example, a new asset in excellent condition would be 100% of the cost list value, while a used asset in average condition would be 40% of the cost list value.
Adjustments depend on the Condition, Value Basis, Cost List, and Cost Method fields for each asset. These factors are used to calculate the Asset Values and the Replacement Costs on the Assets screen, Value view.
If there are no asset mapping records and a cost list is specified, then the Assets screen, Value view uses the asset cost from the Cost List Line Items view. For more information about assets, see Siebel Field Service Guide.
To map the cost of assets for specific product lines
Navigate to the Administration - Pricing screen, then Cost List screen.
In the Cost Lists list, select a cost list.
Click the Asset Mapping view tab.
In the Asset Mapping form, add a new record and complete the necessary fields, as described in the following table.
Field Comments Cost Field
Select the value that is used as the basis of the cost calculation. options are as follows:
Asset Value. This calculation is based on the original cost of the product.
Replacement. This calculation is based on the cost list value of the product.
Condition
Select the condition of the asset.
Value Basis
Select the value basis of the asset. The value of the asset is adjusted based on your selection. options are as follows:
Scrap. This is the value of the asset as scrap. In many cases, this involves depreciating to zero.
Original. This is the original basis for the value of the asset.
Adjusted. This is an adjustment based on a one-time event. For example, you could use this if you drop the asset and the damage reduces its value.
New. This is an adjustment for a new product. For example, a new car drops in value as soon as you drive it off the car lot.
Refurbished. This is the value of the asset when it is refurbished.
Used. This is the value of the asset when it is sold as used.
Cost Method
This is the same cost method used in the Cost List Line Items view.
Factor
You can leave the Condition and Value Basis fields blank and instead enter a value in the Factor field, which specifies the percentage of its cost at which this asset is valued.
If Condition or Value Basis are entered, then they override the Factor field.