[ERP] The difference analysis control of standard cost in ERP

At present, most mature ERP systems are integrated with standard cost management system. Due to the highly integrated nature of the ERP system, the effects of various factors on the standard cost require a lot of time and effort from the relevant personnel to analyze, after all, the intelligent system still needs people to participate. This paper will focus on the analysis and control of differences.

One, the standard cost difference type Standard Cost difference source main existence three stages, namely: purchase, storage and production. The difference in purchasing process is mainly caused by the unworthy ratio of order, invoice and receiving link. In theory, the elements of the three should be consistent, but in fact, in addition to the purchase price and standard cost of the artificial set of reasons, due to various other reasons caused by different factors vary widely. In order to control the main factors, prices, invoices, standards and other differences almost become the standard setting. In theory, the storage is static, but for various reasons, the difference between the physical and the book always exists. In the logistics process, any place where the material is stored is at risk of being inconsistent with the account. The production process may be due to a variety of reasons for the actual material and material bills, labor and manufacturing costs will also be due to the standard rate and the actual deviation caused by the difference. Second, the difference of analysis and control only fully grasp the source and cause of the differences, can fundamentally analyze the difference in cost, and take effective means to control the difference in cost reduction anomalies, in order to maintain inventory and cost of authenticity and rationality. The differences in the procurement process are always around the order, invoice, receive three links generated. The purchasing department should collect the relevant information from each month and find out the root of the problem to solve the difference of the purchase link. Tracking control is applied to the key points of all activities in the procurement process, and the accuracy and timeliness of information flow is enhanced. For example, for the release and delivery of purchase orders, the buyer's order information and the information received by the supplier should be collected for analysis. Usually due to weak control caused by a single error (Quantity, Unit price, unit, currency, etc.), or due to vendor negligence caused by processing errors. At the same time because the supplier with the wrong order information will cause the corresponding invoice, shipping errors. In fact, the negligence of the supplier's financial personnel, as well as the error of delivery, and the main idea of receiving people, all caused the difference. All of the above links may be the root cause of the problem if the procurement discrepancies are traced. Therefore, the corresponding control process must be clear and effective. The purchasing department should coordinate with the Finance department to check the difference to the order, strengthen the control of these control points, and increase the weight in the evaluation index. Storage links are usually due to the company's management of the loopholes, the leakage of personnel, material value revaluation, BOM problems caused by differences. The recorded material information and the actual inventory discrepancy in the ERP system shall be adjusted according to the written request of the responsible person for reporting and approval. Due to the variance of the material value revaluation, the LIFO method is used to distribute the inventory cost and the cost of the sale. BOM errors can cause errors in inventory quantity and value, and manufacturing enterprises should review and control the BOM structure and version to avoid the resulting differences. Differences in manufacturing processes are often caused by errors in the BOM, inventory, order errors, picking, etc., causing various anomalies and cost fluctuations. The company should analyze the reasons for the difference of production orders, and lead the organization by the production management personnel to analyze the causes of the differences, find out the reasons and take measures. III. conclusions and recommendations due to high ERP systemIntegration, any upstream abnormal business will result in a difference. The company should standardize the operation process, strengthen the quality control of the system input information, and take the difference responsibility from the responsible person responsible for the differences, gradually reduce the probability of differences from the source, so that the standard cost really become a weapon of enterprise management.

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[ERP] The difference analysis control of standard cost in ERP