This guide outlines seven essential activities for finance and accounting professionals in manufacturing companies, focusing on product costing, profitability, inventory valuation, process costing, variance analysis, and budgeting. It emphasizes the importance of accurate, granular data for informed decision-making and provides insights into the use of the Impactecs platform for managing cost and profitability models. The platform aids businesses in creating detailed financial models and adjusting variables to assess their impact on performance.

1. If you’re in finance or accounting at a manufacturing company, then
this guide is for you. To understand and explain your company’s
performance, here are the SEVEN activities that must be a part of
your analytics process.
[Seven Finance Activities Every
Manufacturing Company Needs]
This guide is published by 3C Software

2. [Product Costing]
For product costing, more is better. Calculating product costs –
regardless of methodology – should occur at the most granular level
available for every product/SKU manufactured. With this level of cost
detail, the data user can drill down to easily verify and understand
summary numbers.

3. [Profitability]
Regardless of methodology – allocation, activity-based, or absorption –
the most important aspect of understand profitability is creating a
standard process that provides visibility from every dimension. Calculating
profitability must occur from both the product and customer perspective
to get a complete picture of company performance.

4. [Inventory Valuation]
Inventory is a critical balance sheet item. Outside influences like raw
material price changes and shifting product demand make accurately
calculating value complex. Consistent valuations require developing a
set of rules that comply with GAAP and internal auditing rules.

5. [Planning and Scenario Analysis]
Best-of-breed cost and profitability processes include the ability to
adjust any variable – raw material prices, currencies, machine
efficiencies, labor rates, product volumes and mixes, etc. – and see the
impact across the board. The accuracy of forward-looking analytics is
directly correlated to the level of cost data available.

6. [Process Costing & Rate Building]
Costs are generated as part of the production process and are allocated
to products using rates. The most accurate way to calculate allocation
rates is by pooling spending (planned or actual) and using drivers to
allocate spending to each cost center. Rates are calculated by dividing
the pool by the appropriate driver and then used to apply cost center
costs to individual products.

7. [Variance Analysis]
Whether comparing planned to actual results or two the difference
between possible scenarios, variances provide insight and value. To get
a true understanding of a company’s performance, both usage (units)
and cost (dollar) variances for materials, labor and overhead at each
level (SKU, department, plant, division, company) are necessary.

8. [Budgeting]
Estimating operational costs for future periods must guide spending
decisions. Allocation rules are used to assign spending and pools of
dollars are linked with general ledger accounts. To keep budgets
relevant, recalculate the results periodically to account for current
market conditions.

9. [Meet ImpactECS]
ImpactECS is used across the globe by leading companies in many
manufacturing sectors. The platform offers business users the
flexibility to build and manage complex cost and profitability models
and decision makers access to detailed results with just a few clicks.

10. Create an [unlimited number of detailed cost models] that align with your
business processes and use [any accounting methodology].
Generate [product and customer level P&L statements] that offer [drill-down
capabilities] to view the drivers that affect profitability.
Create planning models using the [same data and logic] as the production
system to simulate the affect of [adjusting any model input].
Calculate inventory values using [LIFO, FIFO or weighted average] and include
costs for [subcontractor inventory, consignment products, and reserves].
[Collect direct spending] using historical data or [calculate from a zero-basis]
to [dynamically calculate rates] at the natural cost elements.
[Calculate variances at the account level] and post results directly to the
general ledger.
Build budgets using [historical data or from a zero-basis] and [flex the
results] to see how changes affect performance.
Product Costing
Profitability
Inventory Valuation
Process Costing & Rate Building
Planning & Scenario Analysis
Budgeting
Variance Analysis
[What can I do with ImpactECS?]

11. [Ready to Meet ImpactECS?]
Online www.3csoftware.com
Social
Phone 800-226-2036
Email sales@3csoftware.com