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Process Cost Accounting with CostPerform

PostMail has been relying on CostPerform for its process cost accounting for years. One stength of this software is its flexibility to quickly map and calculate the most complex costing models.

PostMail transports consignments (letters, newspapers, etc.) safely and reliably – in Switzerland and across borders. Private and business customers enjoy the benefits of high-quality products and individual solutions from the moment a package is submitted until its delivery. Digital services complement the offer. At the end of 2020, as part of a Group-wide harmonization and standardization of value flows, the calculation models had to be completely revised and adapted to new calculation standards and regulations. This is where the e3 and CostPerform came into play.

Challenges

  • Complex cost allocation
  • Required: Fast processing of planning calculations
  • Adaptation to new calculation standards

Procedure

  • Use of the CostPerform software
  • Workshops on the adaptation of cost models
  • Simulations and optimizations

Results

  • Flexible mapping, adaptation and optimization of existing cost models
  • Simulations and complex model calculations within 30 seconds
  • Traceable costs based on process, product, cost type and cost center broken down by period

Today, PostMail is confronted with higher unit costs due to declining traffic volumes. While prices in the monopoly sector are regulated by the Federal Council – according to the applicable law, it sets the
price caps – where there is no monopoly, the market sets the prices.
Under these circumstances, stringent cost models are an important basis for controlling cost developments. In addition, these cost models are an important foundation for justifying to the regulatory authorities a price setting and / or cost reduction measures adapted to the new market conditions in a comprehensible manner.

Expected costs vs. actual costs

PostMail has been successfully using the CostPerform software for several years to analyze process costs.
As part of a Group-wide harmonization of value flows, it was now necessary to revise the cost models and adapt new calculation standards and regulations. In addition to calculating the current and past cost prices, it was also a matter of showing a monthly calculation of the differences between the expected standard costs and the actual actual costs. Finally, it should be possible to periodically report and combine this information at different levels (such as products, (partial) processes, cost centers and type of the cost model.
The costing software CostPerform should accordingly ensure that the differences between standard costs and the actual infrastructure costs of the sorting center (cost type) in Zurich (cost center) are available month by month (period) as part of the sorting (process).

Enabling simulations

A central requirement for CostPerform is also the ability to create simulations for past periods with adapted cost drivers: What would the cost allocation of an earlier period have been if new specifications of cost drivers had been used? With this information, the cost accounting team is able to inform all relevant stakeholders such as product managers or regulators about the expected impact on their key performance indicators (KPIs), weeks and months before they go live with the new requirements.

Less than 30 seconds

Instead of hiring a consultant to revise and adapt to the new standards of the current model, PostMail decided to do so with its own team by «learning on the job». Thanks to some workshops together with specialists from e3 and CostPerform, the company managed to set up a prototype of the new model, which could be quickly expanded and tested with live data. Currently, the model consists of over 25,000 objects and over 350,000 cost allocations. Despite the size and complexity of the model, the total computation time takes less than 30 seconds on a standard laptop.

Target: four hours

The next step is the direct connection of CostPerform to live data. PostMail strives for the magical four-hour mark, so that after the monthly booking has been completed, it should take no more than four hours to transfer the data directly to the current cost model, to run the calculations seamlessly and to report the calculation results to all relevant stakeholders. In any case, we will gladly continue to support PostMail in achieving this goal.

CUSTOMER

Swiss PostMail

INDUSTRY

Logistics

EMPLOYEEs e3 AG

Stephan Stihl

CONTACT PERSON CUSTOMER

Pascal Schneider
(Head of Corporate Accounting, PostMail)

SERVICES

Cost management software CostPerform, adaptation of cost models to new standards

PARTNER

Sander den Hartog, CostPerform

Working with the consulting firms e3 and CostPerform is always a pleasure. I particularly appreciate the agility of the CostPerform software in creating many types of cost models.
We feel very well supported by the team of consultants and are convinced of CostPerform.

PASCAL SCHNEIDER,
HEAD OF CORPORATE ACCOUNTING POSTMAIL



Complex questions, difficult calculations and outdated, inadequate cost management software give many companies sleepless nights. For example, how do you find out exactly how high the costs for the production and distribution of microchips are? Or how much does it cost to deliver an express letter? With ordinary software you will not find the right answers to these questions, but with CostPerform you can calculate and simulate the costs in a comprehensible and fast way.