Why SAP Cost Flow Forensics Matter
When utilities first started running SAP Financials in the mid-1990s, the conventional cost flow model utilized only documents from the FI module. This “FI-centric” approach was suitable for simple cost flows typically those starting at a cost center and flowing into a cost object—for example, an internal order or WBS element using a single allocation, such as direct labor charges.
Fast forward a few years, when utility companies had expanded their SAP footprints and grown by acquisition, and cost flow models became far more complex.
In this scenario, the classic FI-centric model showed its major inadequacy: it obscures the cost objects in between the final and source objects. And it’s these “middle” transactions that typically contain the rich work order detail necessary to respond to regulatory inquiries, prepare for rate cases, and analyze business operations internally. Without easy access to them, Rates departments faced a much greater challenge in answering regulators’ questions satisfactorily.
HPC CFF Exposes Valuable Cost Details
In conjunction with the SAP FERC module and a modern, CO-centric cost flow model with HPC Utility Financials Accelerator, HPC CFF traces back from each regulatory account, identifies each cost object amount through one or more levels upstream, and rebuilds the trail of costs back to the origin. Get the CFF data sheet (.pdf).
Unlike the FERC module’s standard functionality, however, HPC CFF exposes all of the cost objects in the middle of the flow that are hidden from view in a classic FI-centric model. This provides access to the valuable work order details that are so critical to responding satisfactorily to regulators—as well as giving management a complete and accurate view of the business in FERC terms.
With HPC CFF, allocations are visible as costs are absorbed into the cost flow. If a cost can be allocated in the Controlling module, HPC CFF can follow along, re-constructing the path the cost took as it moved from object to object. The more allocations in a cost flow, the more levels CFF will create to show all the “ins and outs” from senders to receivers in the chain.
When an analyst in Rates or Finance runs HPC CFF, the solution generates a series of records tied to a trace ID. It then presents an interactive table of results by FERC account. Playing back costs from final object to source object inside the SAP GUI is simple, and the data can be exported to Excel with the push of a button. Get the HPC CFF data sheet (.pdf).
Delivered Forensics Rules
HPC CFF includes customizable rules that control the forensics based on user requirements. For example, allocations of overheads may not need to be traced back to the source sender. Additional rules may be programmed during implementation, based on your utility’s specific requirements.