Archibus Cloud / Leases / Background Data - Costs
Real Estate Portfolio Management / Cost Administration / Business Process Owner
Real Estate Portfolio Management / Cost Chargeback & Invoicing / Business Process Owner
Real Estate Portfolio Management / Strategic Financial Analysis / Background Data

Define Cost Classes and Categories

Cost categories are used for grouping and summarizing costs for reporting, for the costs generated from the Financial Analysis Console, and for chargeback. Cost categories are associated with cost classes, which roll up cost categories to more general groupings. You first define a cost class, and then add cost categories for it.

Cost categories include a Chargeback Definitions section that enables you to define how to roll up and prorate costs that are meaningful to your corporation, such as line items on your cash flow or income statements, so that you can report on and charge back these costs.

Use the Define Cost Categories by Classes task to add new classes and categories for your costs. You can also use the Define Cost Classes task to add cost classes.

See Cost Categories (Concept).

Leases module

For use with the Leases cloud module, cost categories are a way to categorize and organize your costs.

Some of the material in this topic covers advanced uses of cost categories for the Cost Chargeback & Invoicing and other applications and does not pertain to the Leases module.

Defining subcategories for CAM estimates and CAM adjustments

To track CAM estimates and adjustments, the application provides the RENT - CAM ESTIMATE and RENT - CAM RECONCILIATION cost categories. If you would like to track these costs by subcategories, you can define additional cost categories, such as RENT - CAM ESTIMATE - WATER, RENT - CAM ESTIMATE - ELECTRICITY, or RENT - CAM ESTIMATE - SECURITY. This would enable you to track the breakdown for the CAM estimates. You could also define corresponding cost categories for CAM adjustments enabling you to reconcile CAM costs by category.

For information on CAM, see Managing CAM: Overview

Defining cost types to forecast taxes

If you add the Tax cost type to cost categories that you define, you can manage these costs together. See Cost Categories (Concept).

For example, finance managers can create tax cost projections by adding only costs that have a cost category that has the Tax cost type from the Cost Forecasting Wizard. See Cost Forecasting Wizard

Define cost categories and classes for Strategic Financial Analysis

The Strategic Financial Analysis application uses cost categories when it aggregates operating expenses, when it creates cost records for forecasts, and when it sums costs from specific cost categories when calculating analysis metrics. See Define Application Parameters for Strategic Financial Analysis for a description of the cost categories that the application uses by default.

The Aggregate Operating Expenses action does not replace any manually entered costs, nor does it create any costs for the building / property, cost category and month where there is already a manually entered costs (based on cost status.) Manually entered costs have a cost status that is different than "AUTO-SUMMARY".

If you create cost categories for budget expenses that you enter manually, or for actual expenses that you enter manually, be sure to use cost categories that are distinct from those used by:

• The Aggregate Operating Costs action (which uses the cost categories in Problem Types table to aggregate work order costs into scheduled costs, and uses the cost categories in Activity Types to aggregate action items from Project Management and Service Desk into scheduled costs)
• The Forecast Capital Costs action and the Forecast Income and Expense Actions, which enter in forecasts of Scheduled Costs for capital expenses and Recurring Costs for income and expenses.

For instance, by default the Forecast Income and Expense Actions uses "MAINT" (i.e. the AbRPLMStrategicFinancialAnalysis-CostCategory_Maintenance application parameter value) as the Cost Category for any budgeted maintenance records. If you add your own records manually, use a different category, such as MAINT-OUTSOURCED. In this way, your manually estimated costs will never "double up" with the automatically generated values. This approach also keeps Cost Administration processes from duplicating data. For instance, if you have a Recurring Cost for maintenance, and generate Scheduled Costs for it, the Cost Administration actions make sure there are not two records in effect for any time period by starting any Recurring Costs at the Changeover Date.

You can still use the roll up actions, such as Update Analysis Metrics, to roll up data from all cost categories into one analysis. For instance, Maintenance Costs (fy) metric – ops_Costs-Maintenance_an_fy – uses a wildcard to sum up all costs LIKE "MAINT%" (that is, the AbRPLMStrategicFinancialAnalysis-CostCategory_MaintenanceAll value). In this way, the metric can roll up both the automatically generated and manually generated values into one sum.

The following describes when you might want to have both manual and automatically generated costs:

• You can use the manual costs for budget forecasts (for example, for maintenance), and use the automatically generated costs for historical actual work (for example, for all work requests that are finished).
• You can use the Aggregate Operating Expenses action to sum all costs captured by in-house personnel and external providers that use Archibus. You can use manual costs for recording the cost of outside service contracts for vendors that do not record their work in Archibus.
• You can mix results from different systems. For instance, inside-building maintenance may be managed in Archibus, but factory floor equipment may be managed in Maximo. You can still get a feed of the Maximo costs and aggregate all of them cleanly.

SFA application parameters map analysis metrics to cost categories. Working from the Smart Client, add-in managers can personalize the cost category the application uses. See Define Strategic Financial Analysis Application Parameters.

Step 1: Add new cost classes

Develop your cost classes, which provide the first level of roll-up above cost categories. You also have the option to assign the cost class a super-class. Cost super-classes provide a higher level of cost roll-up categorization.

To add a new cost class and optional super class:

1. Select the Define Cost Categories by Class task or the Define Cost Classes task.
2. In the Cost Classes section, click Add New.
3. Complete the following:

   Cost Class -- Enter a unique value to specify the Cost Class, which is the first level of roll-up above Cost Categories. This field uniquely identifies Cost Class records.

   Cost Super-Class -- If you want to provide a roll-up level above the class, choose a value from the drop-down list, such as OPERATING EXPENSE.

4. Click Save.

   The Cost Class appears in the Cost Class list.

Step 2: Add new cost categories

To add a new cost category:

1. Select the Define Cost Categories by Class task.
2. In the Cost Categories selection list, click Add New.
3. In the Cost Categories section on the right, complete the following:
   • Cost Category -- Enter a unique value to identify the cost category, such as: BUILDING - MAINTENANCE, RENT - BASE RENT, TAX - PROPERTY TAX, TAX - SCHOOL TAX, UTILITY - ELECTRIC.
   • Cost Class-- Click the ellipsis, and select a Cost Class from the list.
   • Cost Type -- Select a value from the drop-down list. Cost Types in the list include CAPITAL EXPENSE Cost Groupings, such as assets, liabilities, non-recoverables, amortization, depreciation, and financials. By entering both Capital Expense and Operating Expense costs, you can track the total cost o ownership. The Cost Type identifies cost categories with specific types. If you define types, you can search for and manage costs by type. For example, you can create tax cost projections by adding only costs with these cost tax types from the Cost Forecasting Wizard. See Cost Type section of Cost Categories (Concept) for more information.
   • Account Code: Select the account this category is associated with. For total cost of ownership reporting, the application groups costs by Account Codes that are associated with chart of account and chart of account cost grouping.
4. In the Chargeback Definitions section, select the Assigned To - Rolls Up To - Prorates To value for the cost. (This field is not applicable to the Leases cloud module.)
5. Click Save.

See Also

About Cost Categories

The Nine Chargeback Definitions