Planning & Budgeting using SAP Cost Center Planning

International Textile Limited – Information Systems

Cost Planning & BudgetingManagement Meeting

November 18, 2015

Objective

International Textile Limited – Information Systems 2

Cost Planning

Monitoring Actuals

Variance Reporting

Preventive Measures

Cost Reduction

Classification of Expenditure

International Textile Limited – Information Systems 3

Expenditure

Capital Expenditure

Upgrade Costs

Expansion

New Investment

Revenue Expenditure

BOM Related

Conversion Costs & Operating

Expenses

B A L A N C E S H E E

T

P R O F I T & L O S S

Historical Trend of Last 3 Months

International Textile Limited – Information Systems 4

Cost Element July 2015 Aug 2015 Sep 2015

BOM Related Costs 220 377 434

Conversion Costs & Operating Expenses 193 174 185

Total Cost for the Period 413 551 619

Conversion & Operating Cost as a % of Total Cost

47 % 32 % 30 %

Cost of Manpower 93 70 76Manpower Cost Proportion 48 % 40 % 41 %

Other Costs Proportion 52 % 60 % 59 %

------------ Figures in Millions PKR --------------

Way forward

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Mapping in SAP

International Textile Limited – Information Systems 6

Department

Cost Cente

r

Expense

Head

Cost Elements

Cost Center

Cost Element

Conversion &

Operating Costs

Cost Center Structure

International Textile Limited – Information Systems 7

International textile Ltd

Operations

Terry Textile

Sizing

Weaving

Processing

CMT

Garments MJS Terry Trading

Services

Export Finance & Costing

Information Systems

SAP

Networks

Internal Audit

Cost Center Structure in SAP

International Textile Limited – Information Systems 8

SAP T-CODEOKENN

Cost Element Structure

International Textile Limited – Information Systems 9

SAP T-CODE: S_ALR_87013611

Future Action Points

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Plan

Actual

Monthly Meeting of all HODs

Review of Costs & Variance Analysis

Last Date to Submit Cost Center Plans = November 30, 2015

Planning & Budgeting Techniques

International Textile Limited – Information Systems 11

Budgets

Fixed Budgets

Rolling Budgets

Incremental Budgets

Zero Based Budgets

Time Frame

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Cost Center Planning Templates to be filled by:

November 30, 2015

Templates to be provided to Costing Department