First to Implement SAP Profitability & Cost Management Transaction Costing

PCS Consulting was the first consulting firm to implement the SAP Profitability & Cost Management (PCM) Transaction Costing solution for Customer Account Level Costing and Profitability.

New Transaction Costing Feature of PCM

With its deep experience successfully implementing the SAP Profitability & Cost Management (PCM) solution, PCS Consulting was chosen to be the first SAP Partner consulting firm world wide to implement the new Transaction Costing feature of PCM.  The new Transaction Costing (TC) feature, first available in the PCM 7.0 version release, provides the ability to model costs and profitability at the transaction level.  No longer is there a limitation on the number of services, products or customers for the calculation.  With TC, tens of millions of calculations can now be made at the customer account or individual transaction level.  Once all costs and revenue are determined at the TC level, a reporting datamart can be developed for the desired profitability & cost management reporting and analysis.  The results can be reported and analyzed at any level, product, industry, customer, channel, region, etc.  While SAP also provides the reporting BI tools, there is no restriction.  Any of the other vendor BI reporting solutions can be used, including Oracle Hyperion Essbase, Cognos, MicroStrategy, Microsoft, etc.

First Transaction Costing Implementation

PCS Consulting is currently implementing the SAP Profitability & Cost Management (PCM) Transaction Cost (TC) solution for one of the nations largest Farm Credit Financial Services organizations.  Profitability will be provided at the product, customer, channel, relationship manager levels, with drill down to the specific transactions, transaction attributes, activities and resources that generated the profitability.  In addition to this being the first TC implementation, a Time-Based methodology for costing is also being used.

Time-Based Costing

PCS Consulting has significant experience implementing the Time-Based methodology, first incorporating it in 1997 with other vendor solutions.  With the new TC feature of PCM, we are using standard activity times at the activity transaction attribute level.  For example, the standard time to prepare documents for a loan may depend on multiple things.  What product, what customer risk rating, size of loan, what channel, what industry, etc.  Each individual category of these things can have a unique standard time to perform the loan documentation activity.  In addition, each resource performing this activity can have unique standard times.  The solution calculates the transaction cost for each combination of the resource performing the activity and the individual transaction attributes using the actual resource costs, standard times and actual transaction volume.  With this methodology, the system dynamically calculates and proportions costs to different products, customers, etc. accordingly as the mix of transaction volumes change from one period to the next  No monthly percentage allocation data collection is required.  Some top down percentage allocations are still used, but minimized to areas updated less frequently.


The result of combining the use of Transaction Costing and a Time-Based methodology provides significant advantages:

  • Profitability information provided is more accurate,
  • More dynamic to change,
  • Less period maintenance
  • More transparent view of costs and sources of them,
  • A logical and defend able costing methodology,
  • Increased ability to analyze and answer "why" not just "what"

Learn More:

Contact Us
This e-mail address is being protected from spambots. You need JavaScript enabled to view it


Valid: CSS 2.1 & XHTML 1.0T