How can organizations track and analyze overhead costs in SAP FICO?

Utilizing activity-based costing (ABC) and overhead cost controlling allows organizations to track and analyze overhead costs more accurately and effectively. ABC allocates overhead costs to products or services based on the actual activities that contribute to those costs, rather than using simplistic measures like direct labor hours or machine hours. This method recognizes that different products consume overhead resources differently, leading to more precise cost information.

Overhead cost controlling, part of the SAP FICO module, specifically focuses on managing indirect costs that are not directly tied to a specific product or service. By doing so, organizations can identify cost drivers, assess the efficiency of resource utilization, and make informed decisions regarding budgeting and pricing strategies. Together, these methodologies enable businesses to streamline their performance and improve profitability through enhanced visibility into how overhead expenses impact overall financial health.