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Product Budgeting

Product Budgeting

Microsoft Dynamics AX 2012 includes comprehensive features for the definition and management of budgetary (forecast) values.
The planning phase of the budgeting process in particular can be supported by the definition of budgetary scenarios and workflows. The high degree of integration between the various modules makes it possible to automatically transfer budgetary values, e.g. the quantity and pricing information of the sales planning process can be used to generate budget register entries for sales and costs of materials.

Challenges

Manufacturing companies face a particular challenge when planning and budgeting material and manufacturing costs based on the quantities forecast in sales plans.

  • Production resources are only available to a limited extent and have to be ideally deployed in order to optimize contribution margins.
  • Sales volumes and deadlines are not usually consistent with the production volumes and deadlines.
  • The calculation of the planned levels of consumption and hours as well as their valuation has to be performed with minimal time inputs.
  • Values (costs of materials, hourly and surcharge rates) need to be understandable and easily adaptable in order to be able to calculate different planning scenarios.
  • A forecast contribution margin calculation is just as necessary as support to answer additional questions related to cost accounting such as make-or-buy decisions and investment-based calculations

Solution

The Product Budgeting module tackles the challenges highlighted above and makes it possible to automatically generate and transfer budgeted values and quantities derived from a complete and integrated calculation of the forecast costs of manufacture.

  • Planning sales volumes and plan/actual cost calculations directly in Microsoft Office Excel with online access to Microsoft Dynamics AX via Microsoft Office Add-ins.
  • Detailed sales, costs and capacity planning – taking into account the complete MRP rules by means of the Microsoft Dynamics AX product program planning features as well as the performance of special cost estimates.
  • Sales costs and performance budget – transfer of the calculation results (sales, costs and manufacturing hours) into the Microsoft Dynamics AX budget module.

Standard cost estimates

  • A web-based service for the definition and processing of the values for requirements planning (sales forecasts) in Microsoft Excel by means of Office add-ins.
  • The generation of cost estimates on the basis of forecast production orders – these are derived from requirements planning by means of the product program planning.
  • Updating purchase prices used for requirements planning on the basis of the values of the cost forecasts.

Budget value generation

  • Derive budgetary values from the cost forecasts for materials, manufacturing and indirect costs.
  • Generate appropriate budget register entries on the basis of the real account integration settings as well as the financial dimensions of requirements planning.
  • Transfer the calculated planning hours to the relevant budget register entries for capacity utilization in order to display these in the cost accounting module.

Benefits

  • Forecast  contribution margin calculations – by means of the automated generation of budgetary values for manufacturing costs.
  • Increased planning transparency – by taking into account and displaying different planning scenarios.

More information

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