Profitability and costs management (PCM) examines the cost-benefit from a different perspective as accounting does. So called management accounting  is created in the first step the costs of accounting are allocated to the various processes in the organizational structure and then distributed to the individual costs items, which usually tend be to clients, products or sales channels. Cost objects in terms of the method ABC (Activity Based Costing), are consumers of the costs. Based on such costs objects is possible to create Activity Based Budgeting (ABB).

Most successful organizations have a firm handle on revenue sources and direct costs. But many lack sufficient understanding of how the products they manufacture and the customers they serve consume support services and contribute to other indirect costs. Without detailed visibility into enterprise expenses for sales, distribution, finance, IT, and so forth, it’s difficult to measure the financial performance of individual products and customers or make informed decisions that reduce costs and optimize profitability.

Activity-based costing (ABC) has long been recognized as a valuable tool for managing costs and improving performance. When conducted effectively, ABC provides rich insight into enterprise performance and action-oriented information that help managers at any level of the organization use this data as a baseline for strategy development.

Our company is focusing beside others on tool SAP BO PCM – Profitability and Cost Management. With the SAP® BusinessObjects™ Profitability and Cost Management application, organizations like yours – in industries from financial services to the public sector – can increase visibility into enterprise costs. The application helps you align operational resources and capacity with demand. You can thereby increase revenues by focusing on multiple dimensions of your business, including the products, customers, and distribution channels that are most profitable.

The application enables user-friendly, rapid, and efficient modeling. With reliable, on-demand analysis and scenario modeling, you have deeper insight into the levers affecting costs and profitability at any time.