Cost Control Software: Key Features, Benefits, Recommended Products for Cost Management
ScienceSoft applies 32 years in software development and practical knowledge of 30+ industries to help customers implement effective cost control software.
Cost control software: the essence
Cost control software enables automated cost estimation, budgeting, cost allocation, real-time cost tracking, and variance analysis at the company, department, and project level. It integrates with ERP, operations management software, accounting software, and more.
Cost control software can benefit businesses in any industry, including manufacturing, engineering & construction, healthcare, and professional services. The implementation of custom cost control software may take around 10 months. Average costs for building such a solution vary from $160,000 to $400,000 depending on its complexity.
- Configurable cost objects (e.g., a department, branch, project, product, brand, region, customer segment).
- Customizable cost categories (e.g., labor, material, infrastructure).
- Defining the amounts of labor and physical resources required from various cost objects.
- Estimating direct and indirect costs (by cost objects and company-wide), including depreciation, amortization, and property taxes, using analogous, parametric, bottom-up techniques.
- Multi-currency cost estimation.
- Allocation of planned costs by cost objects based on the pre-defined costing method (e.g., direct costing, activity-based costing, life cycle costing, layer costing, multi-dimensional costing).
- Assigning acceptable cost variation levels to each cost item.
- Automated calculation of optimal contingency reserves and cost escalation allowance.
- Creating time-framed company- and cost object-wide budgets based on the estimated costs.
- Customizable budget templates.
- Multi-currency budgeting.
- Setting up time-/cost-based budget limits.
- Cross-departmental budget approval.
Cost tracking and allocation
- Automated allocation of actual costs based on the pre-defined costing method.
- Tracking actual costs, committed costs, and variances (total, per cost object, per cost category).
- Creating custom cost groups to track variances in combination or in relation to each other.
- In-app/email notifications to the employees responsible for company/department/project cost tracking on:
- Costs exceeding the pre-set thresholds.
- Budgets exceeding the pre-set limits.
Cost analysis and forecasting
- Cost performance forecasts with user-defined parameters based on the cost trends under a specified period.
- Automated adjustment of cost forecasts as new data on actual costs appear.
- Cost and budget modeling & what-if analysis.
- Detailed variance analysis to identify the areas of poor/superior cost performance at a granular level.
- (for project cost analysis) Earned Value Analysis providing key metrics on current and forecasted cost performance: EV, PV, CPI, SPI, BAC, EAC, ETC, and more.
Reports and dashboards
- Visualizing actual vs. planned cost flows in a company-wide cost flow model.
- Customizable reports and interactive dashboards (by time period, cost object, cost category) on:
- Actual and committed costs.
- Cost variances.
- Cost trends.
- Key cost performance metrics, including cost progress and profitability.
Security and compliance
- Multi-factor authentication.
- Access to data on cost objects based on user responsibilities.
- Role-based access control.
- Data encryption.
- Data retention and deletion policies.
- Compliance with SOX, GDPR, industry-specific regulations.
- Importing historical and current data on the company-wide operating and non-operating expenses from ERP to cost control software for cost tracking and the automated input of relevant data when creating cost estimates and cost forecasts.
- Importing estimated budgets from cost control software to ERP for overall resource planning, from direct labor and material expenses to rent, security, utilities, and administrative expenses.
Operations management software (OMS)
- Importing historical and current data on the production/service operations-related costs (costs of labor, materials, machine capacity utilization, etc.) from OMS to cost control software to track operations costs and get relevant data to base operations cost estimates and cost forecasts on.
- Importing estimated budgets from cost control software to OMS for the workforce and physical resource planning.
Importing data on the actual cost allocation from cost control software to the accounting solution for accurate cost recording and reporting.
Importing data on planned and actual costs from cost control software to the BI solution to generate reports on actual vs. planned cost performance and cost forecasts.
End-to-end cost control automation
To eliminate time-consuming manual efforts across all cost control stages, from cost estimation and budgeting to the actual cost analysis and reporting.
Automation of cost coding and allocation
To apply user-defined codes to each cost item for easy cost allocation and tracking across the connected systems (e.g., ERP, OMS, accounting systems, payroll systems).
Powerful data visualization capabilities
To enhance cost transparency via comprehensive reports on the cost performance totals and granulars.
To enable seamless integration of the cost control solution with other corporate applications: ERP, an accounting system, project management software, etc.
To provide accurate cost estimates based on the historical cost behavior patterns and variance trends across various cost objects and periods.
Average costs for building custom cost control software vary between $160,000 and $400,000, depending on the solution complexity.
As a result of implementing cost control software, you can expect:
- Up to 60% faster budgeting and cost forecasting.
- 50% faster reporting on actual costs, commitments, variances.
- Decreased budget variance due to precise cost estimation.
- Increased transparency of the budget approval processes.
- Enhanced cost visibility for the employees responsible for cost control and managers responsible for their budgets.
Off-the-shelf software for cost control ScienceSoft recommends
Oracle Cloud EPM Profitability and Cost Management
Tracking costs and profitability of various business segments for midsize and large companies.
Rating: 4.7/5 (100+) by Gartner.
- Easy-to-read cost and profit traceability maps.
- Seamless integration with Oracle ERPs, including the ERP Cloud, eBusiness Suite, PeopleSoft, and JDE.
- Hybrid cloud deployment.
Cautions: The product is available under the general Oracle EPM Enterprise Cloud license only.
- Automated recursive and multi-tiered cost allocation.
- Rule balancing reports on key metrics that drive cost allocation.
- Pre-built analytics providing insights to the cost drivers.
- Configurable dashboards to visualize actual costs and profits by cost objects.
- What-if cost scenarios to test various cost drivers and quantities and model the impact of potential business and regulatory changes.
$500 user/month (Oracle EPM Enterprise Cloud).
Comprehensive cost flow visualizations of business processes for large enterprises.
- Creating custom cost life cycle models at the department and company-wide levels.
- Pre-built cost allocation and reporting templates for various industries.
Cautions: No support for company-wide budgeting, perpetual licensing only.
- Multiple cost allocation models, including time-driven ABC, capacity-aware costing, and multi-dimensional costing.
- Automated calculation of cost components and net margins.
- Intelligent simulations to generate future cost performance scenarios.
- Supporting higher-volume cost object models in the big data layer.
Starts at $17,500 (for 1 license, 1 workstation) and can reach $125,000+ depending on the network configuration requirements.
ScienceSoft recommends choosing custom development in the following cases:
- You need to automate business-specific cost allocation rules.
- You need to automate cost control processes based on your company’s specific cost control policies.
- You need cost tracking software providing specific features, for example, built-in cost scheduling, custom cost structures, approval workflows based on tailored rules, etc.
- You want to avoid costly and effort-consuming customization when integrating a cost control solution with your specific existing software.
Having 14-year experience in custom financial software development, ScienceSoft helps businesses build effective cost control solutions to enable accurate cost allocation and prevent budget overruns.
Cost control software consulting
- Cost control needs analysis.
- Assessment of existing cost management software (if any) and its integration points.
- Outlining optimal cost control software features, architecture, tech stack.
- Preparing an integration plan (with ERP, accounting software, project management software, etc.).
- Project cost & time estimates, expected ROI calculation.
Cost control software implementation
- Cost control needs analysis.
- Cost control solution conceptualization.
- Architecture design.
- Cost control software development and QA.
- Cost control solution integration into the existing infrastructure (ERP, accounting software, project management system, etc.).
- User training.
- After-launch support.
- Continuous support and evolution (if required).
ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas. We provide businesses with cost control software consultancy, development, support and evolution services. Being ISO 9001 and ISO 27001 certified, we apply a mature quality management system and guarantee the safety of our customers’ data we access during our cooperation. If you opt for a custom cost control solution to power your specific cost management needs, feel free to check ScienceSoft’s offer on cost control software development.