Difference between Order Result and Operating Result, How Do You Prevent That?

Difference between Order Result and Operating Result, How Do You Prevent That?

The premise for this webinar: all costs are covered by the direct hours. Insight into the hours and costs is therefore essential. You do this by first budgeting all man-hours per machine and all indirect hours, then dividing all (labour) costs and finally determining the cost price based on the budgeted hours and (labour) costs. Periodically monitoring these budgets is no less important, so that you can intervene in the event of major deviations.

Who is this webinar intended for?

Determining the cost price and monitoring the budgets is done in MKG using BCO: budgeting, control, optimizing. The BCO modules can only be found in MKG5 and are mainly intended for companies with multiple production employees and machines. If you are not yet working with BCO, this webinar might be interesting for you.

Set up BCO

BCO helps you to increase your insight into the financial situation of your company and enables you to better determine your cost price. Do you have knowledge of cost prices and do you know the BCO modules? In the My MKG Knowledge Center you will find an article with a step-by-step plan to easily set up BCO. From this article you can reach the following topics with one mouse click:

• BCO Administration Settings
• How to Organize the Workable Days and Hours
• How to Divide your Budgets over the Cost Accounts
• How to Determine the Costs of the Employees
• How to Budget your Operations
• How to Use the BCO Occupancy and Coverage Plan

Monitor budgets

Once BCO has been set up, you can start monitoring the budgets. The various BCO dashboards serve this purpose:

• BCO Coverage and Occupancy Monitoring (8000)
• BCO Exploitation Plan (8001)
• BCO Employee Plan (8002)
• BCO Man-hour Monitoring (8003)

Budget monitoring based on these dashboards is central to this article. In addition, some scenarios arising from the design of BCO are discussed.

Questions asked during the webinar

How do you monitor costs? Is there an overview for this?

You can clearly estimate costs per general ledger account. The module My Company contains the standard dashboard Ledger Account Result Comparison (8011). Here you can see what has been budgeted, what has been achieved and what was achieved last year.

Do you need to have an extensive financial setup for BCO?

BCO is easy to use in a Basic setup, in which turnover and costs are booked directly. In an extensive setup, on the other hand, the order result and the coverage result are also immediately visible in the profit and loss account.

Can the man-machine ratio be changed?

The man-machine ratio is estimated when budgeting. You do this in the Operations table. This ratio can always be adjusted within a calculation and at order level.

How do you deal with BCO if you only use one resource to book the hours?

In order to gain insight and be able to make adjustments if something goes wrong somewhere, it is more useful in the context of BCO to differentiate and use multiple resources/operations.

How can you include machine setup hours in the required man-hours?

Setup hours are included in the man-hours. If you have a lot of setup hours, the average man-machine ratio will increase.

Is BCO also available for MKG3?

No. BCO is only available in MKG5.