Cost Planning Method

[Former Member]

Hi,

I want to plan costs for a service industry for the services rendered to the customer. There is no material involved here.

I want to capture the following costs;

1. Salary of Employee

2. Travel Expenses

3. Overhead costs

4. Administration costs

5. Miscellaneous costs

Which is the most suitable cost planning method? Please advice.

Thanks & Regards,

Kabir

[former_member203108 · Accepted solution]

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[Former Member · Accepted solution]

Hi Ahmed,

Thanks for the reply.

1. So you mean we might use Cost element planning otherwise called as Detailed planning. May i know why not automatic network costing ? Is cost element planning better than Network costing. Just to know for my understanding.

2. In cost element planning, say we plan the cost for Overhead and administration cost with different cost elements. How can i capture the actual cost of this in my project ?

Please advice.

Regards,

Kabir

[former_member203108 · Accepted solution]

This message was moderated.

[Former Member · Accepted solution]

Hi,

That means i don't have to create activities in my project structure for Cost element planning, is it so? How do i capture the actual cost in execution of the project? Please advice.

Thanks,

Kabir

[Former Member · Accepted solution]

You can use direct FI posting i.e. FB50 and book the travel, labour cost etc against a particular cost elemnt along with WBS. This posting will debit the WBS for that cost and will be reflected against tht particular CE.

It is recommended to use activities, if you are planning to do capacity planning or scheduling. But from just cost booking perspective you can do direct FI posting. You can also use TE submodule in FI.

Sarang

[Former Member · Accepted solution]

Hi Sarang & Ahmed,

Thanks for the replies.

Regards,

Kabir