Concept Cost accounting for service providers

Many service providers think in terms of “departments” or “business units” (referred to here in this concept as “BU”), which represent their own profit centers. Superordinate units are usually called “areas,” “business areas” etc. and contain several “BU’s” (referred to in this concept as “BA”).

In the simplest case (which unfortunately does not correspond to reality), employees of a BU would only work on projects of their own BU (and employees of other BUs would not), and one would come up with a simple cost accounting that “only” consists of cost units per BU. However, since employees of other BUs can now be involved in projects, there is the problem of internal charging. For this reason, the concept of KST = BU is expanded:

• Each BU consists of a cost unit (CST) and a cost object (CTR). The CST is the “sum of employees” of this BU, the CTR is the “sum of projects” of this BU.
• Since Vertec “knows” which projects the employees are working on via the service entry, an “internal service accounting” (ILV) can ensure that the costs (and income) are correctly distributed even when working beyond the BU boundary. In this concept, Vertec posts the ILV in the cost accounting of financial accounting.
• Finally, in financial accounting (or in the “cost accounting” part of financial accounting), the BU result is presented as the “sum” of the results of the corresponding CST and CTR, presented by cost category (“CA”).

The following graphic illustrates the concept:

Cost accounting concept Vertec AG (KST and KTR per BU), presentation ILV (Intra- and Inter-BU)

With this concept, “internal accounting” can also be carried out within a group, where the different BUs are kept in different financial accounts, via hinge KST and KTR in the individual FBO clients.

At BU level, a result presentation is now possible/desired as follows:

Alternatively, charges from higher-level cost units could also be incorporated into the cost rate of the employees (=full cost rate). The disadvantage of this approach would be that a multi-level DB invoice is no longer possible.
The requirement that the items “rental” and “rental” appear in separate rows implies that the ILV postings between BUs with a different CA on the KST are relieved from the charge on the KTR.