Understanding Training Costs
These topics provide an overview of training costs
Note: If you aren't administering training budgets, you don't need to set up the budgeting tables discussed in these topics. However, to enter costs on training administration pages, you must set up the Training Base Currency and the Cost Unit tables.
To administer training budgets, you need to set up a budgeting structure. Once you set up the basic costs, you can enter budgets for departments in the organization.
To set up training costs and budgets:
Set up a training currency.
In Budget Training, the system converts costs into a base currency that you define. For the conversion to work, you also define the exchange rate to use.
Review cost units.
Cost units are associated with a cost amount. For example, you might use a cost unit of hours or days to measure instructor costs, but use a cost unit of kilometers for mileage. To enter a cost, enter the amount and then select a cost unit for that amount. PeopleSoft delivers a set of cost units in the Cost Unit table that you can add to.
Set up default vendor, facility, equipment, and instructor costs.
To create accurate budgets, record default costs, such as vendor or facility costs, for each training resource. You can set up default costs for the catalog and use them as defaults for the course costs.
Set up student costs.
Training budgets include the cost of sending an employee to a course. For example, if an employee's time is normally billed to a client, time in training represents a loss in revenue.
Set up budget periods and departmental budgets.
When you review a summary of cost information for an employee in the Budget Training business process, the system displays up-to-date costs without running a periodic batch process to update costs or currency conversion information. The system can provide this immediate, updated cost information because it calculates costs as soon as you enter them into the system. The system converts all amounts to a single base currency and stores the computed costs in two training cost tables, TRN_ALL_COST and TRN_CST_ELEMENT.
When you open a summary page in the Budget Training or Administer Training menu to review cost information for an employee, a department, or the entire organization, the system converts the costs in the training cost tables to the display currency that is appropriate for the organizational level. Display currencies can be different from the training base currency.
Note: Departments can have display currencies that are different from the budget base currency for your organization. Depending on the business unit and the department that an employee belongs to, the employee level display currency could be different from your organizational currency. For a budget period, you associate a base currency with a business unit, and with the departments that are associated with that business unit, in the Budget Information table (BUDGET_PERIOD_TBL).
To provide a consistent means of tracking and maintaining training costs, you specify a training currency exchange rate. This ensures that all training costs are consistently converted over the budget periods using a single conversion rate. Specifying a training currency exchange rate helps insulate a training process from external fluctuations in exchange rates and provides you with consistent cost information through the budget period.
To set up training cost currency information:
Create a currency rate type for Budget Training.
Create a rate type for budgeting on the Rate Type page by selecting
Set up a training currency exchange rate.
Define the exchange rates that you want the budgeting processes to use by selecting
Set up the base currency for Budget Training.
Even if you have already defined a base currency for PeopleSoft HCM in step 1, you must define a special training base currency before you can establish any training costs in the Training Administration business process.
Training Base Currency Defaults
When you're entering training costs on the Training Administration and Budget Training pages, you need to understand where the default currency code is coming from and how the system determines the currency defaults in the Administer Training business process.
In Budget Training, a further level of currency manipulation considers the nature of the cost before any cost conversions are performed.
A relationship is established between the nature of the cost and the use requirement at cost summary time. The nature of the cost describes the point in the business process at which you are reviewing costs. The following table describes this relationship:
|
Nature of Cost |
Process Status |
Currency Used for Costs |
|---|---|---|
|
Budget training plan level |
Overall training plan cost summary for specified budget period. |
Currency that is defined in the Budget Information table. |
|
Department level |
Case 1: A budget has been allocated to the current department. Case 2: Current department isn't allocated a budget. |
Case 1: Per unit cost base currency code that is defined in the Department Budget table. Case 2: Base currency that is defined in the Base Currency table for this business process. |
|
No budget period or department; for example, employee training cost. |
Specific to nonbudgeted training. |
Currency that is defined in the system Installation table. |
Training Cost Currency Conversions
The following table explains the training cost currency defaults in the Budget Training and Administer Training business processes. The table also details how the system uses the budget period begin dates or effective dates to establish the exchange rate to use for converting costs from one currency to another.
|
Cost Type |
Currency |
|---|---|
|
Training element cost; for example, facility cost |
Costs are stored in the currency that you enter. |
|
Course costs and catalog costs |
Costs are stored in table TRN_ALL_TABLE in the entered currency. Computed costs are stored in TRN_CST_ELEMENT with the base currency. The system uses the effective date that is entered on the page as the currency conversion date. |
|
Salary costs (general demand) |
Costs are stored in table TRN_DEMAND in the currency that you entered. The system stores computed costs in TRN_CST_ELEMENT in the base currency. The date that the system uses for the conversion from the entered currency to the base currency is the begin date of the budget period for which the demand was defined. |
|
Displayed costs (summary pages, budget plan) |
The system converts costs from the base currency to the displayed currency. The date that the system uses for the conversion is the begin date of the budget period. |
The date that the system uses to convert to the base currency and the date that the system uses to convert to the display currency are not the same, except for the job code cost. The system uses the effective date of the course and catalog costs to convert to the base currency and the begin date of the budget period to convert to the display currency.
The system uses different dates to process the two currency conversions. If the length of time between the two dates is great enough to allow for changes in the currency conversion rate that your organization ordinarily uses, the displayed cost could be different from the cost that you originally entered. To avoid this problem, you define a special exchange rate on the Exchange Rate table for use by the Budget Training business process.
Because you are comparing training budgets with training costs over a period of time (budget period), you set up a unique training currency exchange rate that enables you to track training costs consistently through the budgetary cycle. To do that, you set up an exchange rate type specifically for the training budget.