Real Property / Lease Administration / / Background Data
Real Property / Strategic Financial Analysis / Background Data
Define Cost Categories
Cost categories are used in:
- Leases application / Leases SaaS module. When Lease Administrators enter recurring costs for rents, they indicate the type of recurring cost by selecting a cost category. Cost categories are used to generate lease financial reports by month or year (such as Lease Net Income by Month), Cash Flow, or Costs reports. Lease and Cost Administrators can generate these reports to include any of the cost categories that you define.
- Strategic Financial Analysis. The Strategic Financial Analysis application uses cost categories when it creates cost records for forecasts, and when it sums costs from specific cost categories when calculating analysis metrics.
When you define a cost category, you can enter a Cost Class, Cost Category, and Cost Type for the category. You must develop Cost Classes and Cost Categories if you are planning to calculate chargeback using Chargeback & Invoicing.
The cost type identifies a cost category with a specific type that is used for some reports. Some calculated fields depend on the Cost Type. For example, the Lease Abstract and Rent Roll reports summarize the following values for costs assigned to the lease for the Base Rent, Pct. Rent, Tax, Operating, and Other cost types. For more information about cost types, see About Cost Categories.
Managing Cost Categories 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 Projects 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 the processes of the Costs applications from duplicating data. For instance, if you have a Recurring Cost for maintenance, and generate Scheduled Costs for it, the Costs 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.
Procedure: Define cost categories
To define cost categories:
- Select the Define Cost Categories task.
- Click Add New.
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Enter the following fields:
Field Description Cost Category Enter a unique identifier for the cost category. Your cost categories might include values such as RENT- BASE RENT, RENT - DEPOSIT, RENT- SUBLEASE, SECURITY - PERSONNEL, ADMIN - PAYROLL. Cost Class Enter a unique value to identify the cost class, which is the first level of roll-up above Cost Categories.
Cost Type The Cost Type value defaults to N/A, which indicates a cost with no specialized roll-up category. Other possible values are
- BASE RENT -- Identifies costs that appear in the "Leases and Base Rents" report and that are summarized to the Amount - Base Rent field of the Leases table.
- LEASEHOLD IMP. -- Identifies costs that are part of leasehold improvements.
- OPERATING EXP. -- Identifies costs that are operating expenses and are summed to the Expense - Oper. Total field of the Properties table.
- OTHER RENT -- Identifies rent charges that are not base rents and are not percentage rents but which you wish to include in the summary of costs documented in the Leases table's Amount - Total Rent Expense and Amount - Total Rent Income fields.
- PCT. RENT -- Identifies costs that are determined from a percentage of sales or gross receipts. This cost type is typically used for costs associated with leases for retail properties. These costs get summarized to the Leases table's Amount - Pct. Rent field.
- TAX -- Identifies costs to appear in tax cost summaries, tax cash flow, and tax projections. These costs get summarized to the Properties table's Expense - Tax Total field and are used in property tax rate and assessed value calculations.
- UTILITY -- Identifies costs that are summed to the Expense - Utility Total field of the Properties table.
Assigned To - Rolls Up To - Prorates To This field controls the roll-up and proration strategies for charging back costs to properties, leases, departments, buildings, and accounts. This information is used by the Chargeback Costs - Generate action - Click Save.