Data processing: financial – business practice – management – or co – For cost/price
Reexamination Certificate
1998-08-20
2001-10-23
Trammell, James P. (Department: 2761)
Data processing: financial, business practice, management, or co
For cost/price
C704S008000
Reexamination Certificate
active
06308166
ABSTRACT:
BACKGROUND OF THE INVENTION
Organizations are finding it increasingly difficult to compete in the international marketplace as markets become more global. The increasing competition in many areas of manufacturing, commerce, services, and other forms of business leads to sinking market prices, which in turn causes profit margins to decrease. Meanwhile, rapidly changing technologies lead to greater automation, which increases efficiency but also requires the allocation of funds for the expenses associated with new equipment. When deciding whether to invest in expensive equipment, organizations are forced to weigh the associated long-term costs and benefits.
At the same time, there is also great pressure for organizations to make profits in the short term. Investors are increasingly focusing on short-term results, and product life cycles are generally becoming shorter. Expenditures that create increased overhead need to be understood to justify the impact in the short term.
Thus, organizations have a growing interest in clearly understanding their overhead structure. Cost accounting approaches, such as activity based costing, are often used for monitoring overhead. Detailed analysis and overviews are available for the direct costs of production, such as wages, materials, machine hours, etc. However, indirect costs of manufacturing, sales, and administration are traditionally more difficult to measure, and cost controlling is even more difficult to implement.
In traditional cost accounting, an important tool is the structuring of costs based on organizational and responsibility considerations. This allows identification of where costs occur within an organization. Product cost planning has also traditionally focused almost exclusively on direct production costs. More sophisticated accounting techniques, such as activity based costing, may assist in explaining why those costs came to be what they are, or how they can be changed beneficially. They may also be used to assign indirect costs to the end products, which becomes more important when overhead costs are high. Organizations that are careless with the computation of such costs are in greater danger of costing themselves out of the market. Today, it is even more important that management base its decisions on accurate and current costing information, so that the best strategies for investments, products, sales, distribution, and services may be implemented.
However, these more sophisticated accounting techniques are difficult to implement using the tools available today. Presently, cost allocation is often only value-based, because a simple way to find the appropriate cost drivers has heretofore been unknown. In other implementations, assignments could only use quantities based on inadequate information, such as the amount of direct labor from the routing. In both cases, the results are not sufficient. Simple, fast, and accurate determination of quantity flows is a major challenge facing an adequate cost assignment. Therefore, it would be advantageous to have an effective method, that is quantity or resource oriented, for tracking costs to which accounting techniques are applied.
SUMMARY OF THE INVENTION
The present invention relates to a method for establishing a quantity-based and origin-appropriate allocation of costs between resource-providing (sender) and resource-consuming (receiver) objects using various sources of information. Quantity-based cost allocation (the identification of responsible cost drivers) is an important aspect of cost accounting. A precise quantity framework is utilized to support advanced costing techniques, such as activity-based costing.
The invention is a novel method of enhancing the evaluation and control of costs confronted by an organization. A flexible link to different cost (receiving) objects is created so that an evaluation within different costing applications may occur. As the sender objects and the quantities are determined during the evaluation, the invention allows a sophisticated, demand-driven cost assignment from a receiver point of view (also referred to as “backflush”) to occur.
A process template is provided to accept language-dependent function names and descriptions, parse the functions to create control blocks that represent the functions, and to generate an executable report based upon the control blocks.
An object of the invention is to provide a novel method of tracking costs associated with an organization.
Another object of the invention is to monitor costs based on the organization of business processes which cross functional boundaries.
Another object of the invention is to improve cost transparency in overhead areas with quantity-based and value-based documentation of business process consumption.
Another object of the invention is to accept language-dependent functions within an improved template.
Another object of the invention is to provide a plurality of separate and distinct editor modules for cells within an improved template.
Another object of the invention is to provide a parser that is capable of parsing language-dependent functions within an improved template.
Another object of the invention is to translate external, language-specific functions and parameters into an internal description for use with an improved template.
Another object of the invention is to create control blocks within an improved template, wherein the control blocks are derived from language-dependent functions.
Another object of the invention is to create control blocks within an improved template, wherein the control blocks are internal representations of functions within the template.
Another object of the invention is to provide a standardized definition of interfaces that allows easy communication between a maintenance core module and a plurality of editors for use with an improved template.
Another object of the invention is to generate an executable report of an improved template based upon control blocks derived from language-dependent functions.
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Breuker Jens-Stefan
Rullof Evelyn
Stuckert Harald
von Zimmermann Peter
Chadbourne & Parke
Dixon Thomas A.
SAP Aktiengesellschaft
Trammell James P.
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