PeopleSoft SCM Cost Management Overview

PeopleSoft SCM Cost Management provides the control and flexibility you need to manage costs throughout your inventory and manufacturing processes. With powerful features that support multiple methods of costing, PeopleSoft Cost Management enables you to model your business exactly as you require it. With PeopleSoft Cost Management, you can:

• Maintain multiple sets of books within an inventory business unit for financial, governmental, and management reporting purposes.

• Define any number of cost methods to value inventory transactions; including, standard, actual, FIFO actual, LIFO actual, by specific lot ID or serial ID, perpetual weighted average, retroactive perpetual weighted average, periodic weighted average, or non-cost.

• Determine the type of costing by item, inventory business unit, and cost book combination. This flexibility allows you to mix the type of costing within one inventory business unit; some items can use standard cost, other items can use actual cost, and so on. In addition, the same item can be costed differently using different cost books within the same inventory business unit.

• Calculate the cost of each inventory transaction, including, material, conversion, conversion overhead, landed, inbound, outbound, and other costs based on your cost methods. The system also calculates and updates weighted average costs, purchase price variances, exchange rate variances, negative inventory depletions, consigned items, and return to vendor items.

• Create accounting entries for all inventory transactions that have a financial impact on PeopleSoft Inventory and PeopleSoft Manufacturing. You can design transaction accounting for the basic transactions, location accounting, budget checking, interunit transfers, fund accounting, shipments on behalf of another revenue stream, and interunit expensed issues. These accounting entries can be posted to PeopleSoft General Ledger or a third-party general ledger system.

• Calculate and track costs for makeable items in PeopleSoft Manufacturing. You can calculate the costs of makeable items, co-products, and by-products using standard, actual, or average cost methods. Additional costs besides material, labor, machine, and conversion costs, can be added to makeable items. The system enables you to revalue costs, analyze manufacturing performance, and perform cost simulations. You can closely monitor production costs at every stage in PeopleSoft Manufacturing using inquiry tools and reports to detect potential production variances and analyze completed production.

• Manually adjust the actual or average cost of an item.

• Include landed cost charges in an item's cost, including freight, insurance, duty, taxes, handling, and subcontracted services. Adjustments to landed costs based on the voucher in PeopleSoft Payables can be recorded in a variance account or added to the final cost of the item.

• Record the cost of items transferred between inventory business units. The system calculates the correct transfer price based on the Transfer Pricing Definition component. Accounting entries are created based on your business configuration, including interunit sales and payable accounts if applicable.

• Reconcile the cost of putaways in PeopleSoft Inventory with the vouchers in PeopleSoft Payables using the CM/AP Reconciliation Tool.

• Review transaction costs and accounting entries using powerful inquiry tools and reports designed for financial and management accounting needs. You can monitor accounting entries before and after they are posted to the general ledger system.