Hi PPM practitioners—welcome back! In my last post, I covered the essential setup of the CA PPM Financial Framework (Entity, Locations, Departments, Fiscal Periods). Here I will define the most common financial classifications needed to support CA PPM Financial Planning.
CA PPM financial classifications enable you to properly categorize resources, investments and financial transactions to meet the needs of the organization’s financial planning process. Most of these may be used to group the line item investment cost detail within cost/budget plans. The descriptions below are not meant to be exhaustive, but represent the most common uses.
Resource Classes
Resource classes are typically used to categorize the organization’s various types of labor (e.g. internal labor, external labor such on-shore contractor, off-shore contractor, etc.) for financial planning purposes. Non-labor resource classes may be defined to support categorization of expense, material, and equipment type resources. CA PPM supports definition of different rates by resource class. If financial tracking is not required at a resource category level, create a default resource class. Resource classes are assigned to resources on financial properties and defaulted on actual cost transaction entries; they may not be overwritten during actual cost transaction entry.
Transaction Classes
Transaction classes are commonly used to categorize the various types of cost incurred on investments (internal labor, external labor, licenses, hardware, software, travel, etc.) for financial planning and reporting purposes. CA PPM supports definition of different rates by transaction class. If planning is not required at an expense category level, create a default transaction class. Transaction classes are assigned to resources on financial properties and defaulted on actual cost transaction entries; they may not be overwritten during actual cost transaction entry.
Charge Code
Charge code is one of the customer-driven fields that may be used in financial planning. In the example below, charge code is used to group cost by category of work coming from the investment’s work breakdown structure (WBS). It is also commonly used for sub-categorization of expenses, designating billable/non-billable expense, or for sub-categorization of CapEx/OpEx beyond Cost Type values of Capital and Operating. CA PPM supports definition of different rates by charge code. Charge codes are required by CA PPM for actual cost transaction entry and may be assigned to the project as a default, at the WBS task level or during cost transaction entry. They may also be entered during time entry. If not used by your financial planning process, create a default value.
Input Type Code
Input type code is most commonly used to indicate whether a resource is billable or not. Another common use case is delineation between standard time and overtime for a resource. Input type code is assigned to resources and defaults on time sheets and actual cost transaction entries but may be updated. CA PPM supports definition of different rates by input type code (e.g. standard time vs overtime).
Investment Class
Investment class differentiates different types of work across investments as it relates to the treatment of financial processing. For example, using out-of-the-box CA PPM, “Standard” can be used on investments that generate revenue or with inter-department transfer of charges (using CA PPM Chargebacks). “Internal” indicates that the investment generates no revenue (e.g., administration/maintenance). Investment class is assigned to the investment (or company if used). CA PPM supports definition of different rates by investment class.
Company Class
When applicable, company class can be used to differentiate internal from external customers. Company class is assigned to the company (if used). CA PPM supports definition of different rates by company class.
WIP Class
WIP class is most commonly used to differentiate investments for revenue recognition as part of financial reporting. WIP class is assigned to the investment (or company if used). CA PPM supports definition of different rates by WIP class.
Coming Soon
In my next blog, I’ll cover the role of the cost/rate matrix.
Taking the Mystery out of Financial Planning – Part 1 (The Basics)
Taking the Mystery out of Financial Planning – Part 2 (Financial Framework)
Readers interested in more detail around CA PPM Financial Planning can check out DocOps. I encourage you to participate in the best-in-class site, where you have access to your peers, events and support. You can also reach out to CA Services for information about CA PPM and individualized business outcome references and analysis. Feel free to post in the comments section of this blog or contact me directly via email and Twitter @kdobsonppm.