Financial Management - Accounting
Accounting within Financial Management differs from traditional accounting in that additional category and characteristics must be defined that enable the identification and tracking of serviceitilfoundations.comriented expense or capital items.
- Service recording - the assignment of a cost entry to the appropriate service. Depending on how services are defined, and the granularity of the definitions, there may be additional sub-service components.
- Cost Types - these are higher level expenses categories such as hardware, software, labour, administration, etc. These attributes assist with reporting and analysing demand and usage of services and their components in commonly used financial terms.
- Cost classifications - there are also classifications within services that designate the end purpose of the cost. These include classifications such as:
- Capital/operational - this classification addresses different accounting methodologies that are required by the business and regulatory agencies.
- Direct/indirect - this designation determines whether a cost will be assigned directly or indirectly to a consumer or service.
- Direct costs are charged directly to a service since it is the only consumer of the expense.
- Indirect or 'shared' costs are allocated across multiple services since each service may consume a portion of the expense.
- Fixed/variable - this segregation of costs is based on contractual commitments of time or price. The strategic issue around this classification is that the business should seek to optimize fixed service costs and minimize the variable in order to maximize predictability and stability.
- Cost Units - A Cost Unit is the identified unit of consumption that is accounted for a particular service or service asset.
As accounting processes and practices mature toward a service orientation, more evidence is created that substantiates the existence and performance of the IT organization. The information available by translating cost account data into service account information dramatically changes the dynamics and visibility of service management, enabling a higher level of service strategy development and execution.
Other ITIL Processes
- Configuration Management
- Service Desk Management
- Incident & Problem Management
- Change Management
- Release Management