BCO Budget Control Step-by-Step

Step 1. Coverage and Occupancy Monitoring

The BCO Coverage and Occupancy Monitoring (8000) dashboard can be used to monitor how well the input budgets align with actual direct hours, man-machine ratio, and coverage. It also helps monitor the extent to which costs are covered by the realized direct hours. These are visible both graphically and in grids.

• Hours Graphical
• Hours Monitoring
• Amounts Graphical
• Financial

Review these lists. Pay attention to the red numbers. Orange bars are under budget, and blue bars are above budget. Different scenarios can be considered in relation to the budget:

• Realization: man hours, more / less than budget
• Realization: man hours, more / less than budget
• Realization: man-machine ratio, more / less than budget

Step 2. Exploitation Plan

The purpose of the BCO Exploitation Plan (8001) dashboard is to gain insight into the configuration of the budgeting of operations in BCO. Based on the budgeted hours and operation costs, the net price is compared with the price set for the operation. This dashboard mainly presents the different rates with deviations. Review this list. Pay attention to the red numbers. Adjustments can be made where necessary. Also, focus on administration settings:

• What choice was made for 'Recommended Operation Rate'?
• Which choice was made for 'Cost Price'?

The business budget is presented in an organized manner on the 'Summary' tab. This budget shows the minimum revenue needed to cover costs and generate profit. You can create this budget for internal use and for external financiers as well.

Step 3. Employee Plan

The BCO Employee Plan (8002) dashboard provides insight into which employees are included in the BBO employee labor costs and offers an overview of the labor costs, social contributions, and net rate. Additionally, some key figures related to selected employees are visible. Based on this dashboard, you can see the hourly wage compared to job groups. This can help you adjust job groups to be more aligned.

Step 4. Man-hours

The BCO Man-hour Monitoring (8003) dashboard can be used to monitor how the set budgets align with the actual hours worked by your employees. See how productivity and hourly efficiency (by department and/or employee) have developed throughout the year and how they relate to what you've budgeted.

Step 5. Ledger Budgets

Ledger budgets are linked to the BCO module. Budgets are allocated to ledger accounts and distributed across the periods of the fiscal year. Here, you can find the comparison between budgeted ledger accounts and realized amounts.

Scenarios

Various scenarios are possible based on outcomes from the BCO module.

(*) A small excess in relation to the costs to be covered, about 5%, is fine. A larger cover gives a skewed picture.

Undercoverage

The current rates do not cover costs adequately. As an example, let's focus on the operation "Sawing". The current net rate in MKG is € 48.00. However, the BCO module has calculated a rate of € 64.23. Therefore, there is an undercoverage of € 16.23 per hour for this operation. The total undercoverage amounts to € 137,330, or 22.8%.

The entrepreneur is now calculating with an incorrect (too low) cost price, leading to a mismatch between order result and business result. The entrepreneur can choose to increase the rates. This will result in a better alignment between order and business results. Not adjusting the rates will result in an inaccurate order result.

Overcoverage

The current rates cover more than the business costs. The calculated amount is higher than necessary to cover costs. Overcoverage on rates can be disadvantageous for consumers, as they end up paying more than is reasonable. Any profit may now go into coverage instead of margin.