GaussSoft Profit and Cost includes a wide functionality that allows clients to obtain detailed information about different topics of Corporate Performance Management and Business Intelligence, including the following.

In GaussSoft Profit and Cost you do budgeting with a simulation engine, using a mixture of bottom-up and top-down approaches. You get perfect ‘High Resolution Budgets' for up to 120 periods. And when you are executing your budgets you can compare and correct!

Activity Based Costing – ABC

Activity Based Costing is a great conceptual methodology for obtaining more precise costs and better management and control of processes and activities. It introduced two breakthroughs to traditional cost accounting:

GaussSoft Profit and Cost has tools to capture, calculate or automatically get precise drivers from transactional systems, or directly from people. Drivers are easy to get at very low cost, and they are precise. These methods are 100% precise because they work in the Resource Drivers and on the Activity Drivers.

Although the Time Driven ABC costing used by other software can make an improvement in most of the Activity Drivers, it usually doesn't affect the Resource Drivers, which remain averaged.

Activity Based Management (ABM) When you need to know how and where your resources are being used, and where value is added, retained or lost, there is no better tool than GaussSoft Profit and Cost. You have graphical control of your process and activities and the possibility to define, control and analyze your value chain in many dimensions. ABM is a key tool when if you want to measure and improve performance.

Traditional ABC/ABM costing calculates costs at the activity level. It provides a way to classify the activities that add value versus all others as well as the cost of the activities that add value. But there isn't a conceptual or technical way to know the true amount of value of each activity, or a resource such as the IT department. Suppose that the costs of the activities within the IT department that add value to the company have had an increase of 10% in the last 6 months. Is that good or bad? It depends on whether the value added to the company –in dollars- has increased by a bigger amount. Knowledge Value Added (KVA) is a methodology that calculates value, in dollars, at the sub corporate level. It can be used in GaussSoft Profit and Cost together with ABC, so you can have the equivalent of “Profits” at the sub-corporate level. This gives real meaning to ABM.

Balance Score Cards –BSC BSC is a great tool to communicate a strategy to your company by setting clear, understandable, and measurable goals. It is also a thermometer to check if the goals are being reached. But BSC are meant to be just guides, and when you want to make a through analysis of what happened, and what must be fixed, you need other tools that will specify the dimensions -- including profitability -- defined in your BSC, one of them profitability.

GaussSoft Profit and Cost is a great complement to BSC in two ways.  Because of its higher resolution of information, it helps feed the BSC with rich and accurate data, especially for profitability, like: Net Profit, Gross Profit, Profit Margin, Capacity Usage, Value Added, Performance, Variability and many others. The BSC is a “summarized thermometer”. It tells you that “Profits” are down, but it does not tell much more than that. When you need to know why, where and when, you need a tool like GaussSoft Profit and Cost that can answer this questions for products, channels, customers or activities. And you need the ability to break down every item and track it in time.

Campaign Analysis The profitability related to campaign strategy includes knowledge about the activities and other costs related, and the details around that information. GaussSoft Profit and Cost provides all the information needed to make information-based decisions about results of the campaigns, associated with activities, resources and products or customers at whom the campaign is directed, based in historical results.

Capital Planning The capital planning for a company is a delicate and complex process that will affect decisions that will affect profitability of the business. Is very important to have the option of defining simulations of the potential impact on decisions related to investments in the business.

GaussSoft Profit and Cost allows you to define scenarios of future situations related to new products, markets, operating areas, outsourcing strategies, and so on, providing insights about impact of decisions about profitability and capital changes.

Channel Profitability Determining the profitability of your sales channels is a high-impact issue for companies dependent on channels to generate their global profit. Details about the costs associated with a specific channel and the connections between all costs, are absolutely needed for excellence in channel management. Excessive spending by one channel can make a difference in the total profit of the whole company. GaussSoft Profit and Cost provides all of the information needed to determine a Profit and Loss statement for each channel with all traceability from activities and resources involved in sustaining and developing the channels.

Cost Allocation and General Allocation Allocation is the basis of any profit and cost system that considers all costs, fixed and variable. For simple Cost Accounting, Activity Based Costing or Knowledge Value Added, GaussSoft Profit and Cost has the most flexible, powerful, high-resolution allocation engine:

Other software will produce a few totals for each cost object: total of variable costs, total of assigned costs (or rolled up) and total of revenues.

1. While most costing systems are limited to three levels of allocation, GaussSoft Profit and Cost engine can allocate up to 50 levels and can include cycles and reprocesses. With GaussSoft Profit and Cost there are no limitations to representing the company's true cost and value structure.
2. When you need to analyze a product's performance, totals are not enough. GaussSoft Profit and Cost allocates each account separately, never mixing the results. Full Profit and Loss statements are produced for each customer or product in minute detail.
3. In addition to allocating costs, GaussSoft Profit and Cost can allocate any type of account such as revenues, assets and value. This is important for calculating precise EBIT, EBITDA, EVA or other indicators for each customer or product. The allocation engine can also handle value and use knowledge (KVA's) to calculate value at the sub-corporate level.

Customer Profitability and Segmentation GaussSoft Profit and Cost is the only software the can produce a fully detailed, accurately calculated profit and cost breakdown for each customer. A Profit and Cost statement with the same structure of the company's is presented for every customer in even greater detail if necessary. The revenues and costs are divided into 100 or 500 components, and every one of these components can be analyzed through time.

When a customer is not profitable, there can be many explanations and places to look for. Only GaussSoft Profit and Cost gives you the detail you need to take action.

GaussSoft Profit and Cost comes with Specialized Business Intelligence tools (BI), so you can make multidimensional analysis, trend analysis and product, vendor or customer segmentations and group analysis. For example, maybe a specific customer is buying small amounts, buying a complicated portfolio of products, complaining too much, or returning products too often.

There are a lot of profits won or lost in the behavior of customers and how you relate with them. It is of immense value to understand them and separate the good ones from the bad ones. GaussSoft Profit and Cost is the only tool that can go to the ultimate level of detail.

Economic Value Added (EVA) Economic Value Added is an indicator that shows beyond a simple profit analysis if the company is adding or wiping out value to the shareholders. GaussSoft Profit and Cost is a superb tool to calculate EVA for each cost object and offers capabilities well above the other tools:

GaussSoft Profit and Cost has a high-resolution allocation engine that produces a full Profit and Loss statement for every cost object. From each individual P&L the system calculates EBIT, EBIDTA, net profit, gross profit, or any customer defined profit indicator. Because accounts are never mixed, you can have values for assets, liabilities, and capital accounts. These accounts can be allocated to cost objects, using any costing techniques. So, EVA is calculated accurately for every cost object, and if needed, broken down to the most basic level and tracked over time.

GaussSoft Profit and Cost comes with advanced BI tolls that can analyze EVA and other indicators in many dimensions, including time.

Knowledge Value Added When a company launches an improved product, redefines a process that saves costs, or just gains 2% in market share, the cost system will reflect these improvements in the products or customers. Most of the things you can control are not in the market, the products, or the customers, but in the things that you do and in what you know. ABC and other costing methodologies can't answer this. In other words: they tell you where you get your money, but they don't tell you why.

Knowledge Value Added is a methodology that measures the knowledge within your company: where it is, how much its, if and how it is being used, and how, and what value it is generating in true life. Without it, you know that reducing the IT department and outsourcing will reduce costs. However, you can't tell if you have reduced “returned value” in a bigger amount. What activities or processes should be outsourced, eliminated or improved? GaussSoft Profit and Cost is a great tool to do KVA together with any profit and cost methodology, including ABC costing. With it, you have the equation balanced.

Pricing and Discounts One of the most important uses of costing and profit tools is pricing. Although the market sets prices, companies still have a small margin to play with, and the discount policies are a strong variable to play with.
Many companies have used GaussSoft Profit and Cost for price management for over eight years because:

Separating the costs into fixed, step variable, and variable for every cost object is strategic:

Product Profitability   When a product is doing wrong, there can be many explanations and places to look. Only GaussSoft Profit and Cost gives you the detail you need to take action GaussSoft Profit and Cost is the only software that can produce a fully detailed, accurately calculated profit and cost breakdown for each product. A Profit and Loss statement with the same structure as the company's P&L is presented for every product (even greater detail if necessary). The revenues and costs are divided into 100 or 500 components, and every one of these components can be analyzed through time.

GaussSoft Profit and Cost comes with Specialized Business Intelligence tools (BI), so you can make multidimensional analysis, trend analysis and product, vendor or customer segmentations and group analysis. Maybe this product is sold with profit to some customers, yet a few are undermining profitability. Or maybe it is just that the support center costs too much per unit. GaussSoft Profit and Cost is the only tool that goes to the level of detail needed to discover these problems.

Sarbanes-Oxley Compliance   Sarbanes-Oxley in sections 404 and 409 make the top executives of the companies legally responsible for their financial statements, and orders them to detect inconsistencies and fraud. For instance, for an airline, the equivalent rule would be that “your duty is not to do aircraft maintenance; your duty is making your planes stay in the air”.

Having your financial statements up to date and properly and safely storing documentation is like having aircraft maintenance records. But making sure that you are performing well, and that every number is accurate at the most minute level is impossible without a tool like GaussSoft Profit and Cost.

With GaussSoft Profit and Cost you have:

1. A perfect control and analysis of operations vs. financials. As a matter of fact, you have detailed Profit and Loss statements for every product or customer. The sum of all the P&L's is exactly the same as the company's for every period.
2. There are enough tools and highly detailed information to help you find fraud and inconsistencies.

Supply Chain Management  GaussSoft Profit and Cost's ability to model the complete cost structure of the company includes detailed financial cost and profit analysis, from vendor to customer and including all manufacturing and logistic processes. The tracing tool can track any cost component through many levels back to the source, and through many time periods.
When “accumulated value” is not managed properly, many distortions occur.

Unlike most costing tools, GaussSoft Profit and Cost “stores” value added in cost objects across many costing periods--whether it is products that take months to produce or remaining inventory at the end of the period.

The supply chain has room for improvement, and the best way is by having valid, accurate and detailed information.