1. Introduction
This document summarizes and documents the detailed business process and design for Cost Center Accounting (CO-CCA). It includes the details of Cost Center Accounting structural elements such as key data structure & design concept, process flow and description, GAP Analysis, Technical Development and Scenario List.
Cost Center Accounting defined location of costs incurrence within the organization. Costs that are assigned to cost center include personnel costs, rental costs, and other miscellaneous costs etc. For PG, cost center accounting is used to determine costs and passively control costs for each functional unit within the organization that provide decision-making data for management. The structure of cost center is designed to represents organization unit (stream & activity), and logical (non-organizational unit) where the overhead costs are collected by organization cost center while expenses other than overhead costs are recorded to logical cost center. For example, water and electricity expenses are charges to organization cost center while fuel uplift expenses are collected to logical cost center. In addition, cost centers are maintained within a hierarchy, which is a representative of entire business organization that helps to implement company’s internal reporting. The hierarchy development is a central to all cost accounting reporting within the controlling module.
Costs incurred within cost center are track and passively controlled in THB by the concept of Cost Center Planning. For PG, the operating expenses are planned to particular cost center periodically in annual terms and compared with the actual consumption to measure the operation efficiency which is crucial to management’s determination. However, different concept is follow for the operating expenses incurred for Marketing/Sales/PR and Unplanned Strategic Job where costs actively controlled with the concept of Internal Order Budgeting (Refer to PG-BBD-MIO for more details). Also, direct route expenses planned in route profitability that break down details by flight, its total must reconcile with direct expenses planned by cost center by the specific cost element. Several alternative plan versions are used for planning process (Refer to Appendix B, for more details about plan version); however the final annual plan figure is always recorded in plan version ‘0’ which is used to passively control costs by the comparison of actual/plan figure in reporting. In this case, a particular unit of the organization is given responsibility for controlling costs of the operations in which it holds authority.