actual cost and planned cost methods

What is meant by actual cost and planned cost methods?

The term "settlement of internal services according to actual cost and standard cost procedures" refers to the methods that companies use to settle internal services and costs between different departments or cost units. This involves distinguishing between actual costs (incurred costs) and standard costs (budgeted costs). Actual costs are based on the costs actually incurred, while standard costs are based on predetermined budgets or estimates. This settlement is crucial for cost control, budgeting, and reporting within a company.

Typical software functions in the area of "settlement of internal services according to actual cost and standard cost procedures":

• Cost Accounting: Recording and processing of actual and standard costs for various cost centers.
• Cost Allocation: Automated allocation of internal services and costs to the corresponding departments or projects.
• Variance Analysis: Comparison of actual costs with standard costs to identify variances and their causes.
• Reporting: Generating reports that detail the settlement of internal services.
• Budget Control: Monitoring budget compliance based on standard costs.
• Real-Time Data Analysis: Providing real-time data to support decision-making processes and monitor financial performance.
• Scenario Planning: Simulating different scenarios to predict the impacts of changes in costs or services.