Creating or modifying a cost model

To understand how cost models work, we recommend you review Working with cost models.

TIP: To view and compare different cost model configurations, you can open them by using separate browser tabs.

To create or modify a cost model:

  1. From the Enterprise Decision Support home page, in the Cost Accounting section, click Modify a cost model or Create a cost model.

    • If modifying a cost model, from the cost model home page, select the model name from the Select cost model drop-down at the top of the page, and then click the gear icon .

  2. In the Create/Modify a cost model dialog, complete the following fields, and click Next:

    Field Description
    Use this as the most current model

    Do one of the following:

    • To designate this as the current cost model, click the slider to Yes.

    • To not use this as the current cost model, click the slider to No.
    Summarize to encounter?

    Do one of the following:

    • To designate this as a production or "live" model by allowing Axiom to summarize the costing results at the encounter level, click the toggle to Yes.

    • To designate this as a what-if model by preventing Axiom from summarizing the costing results to the encounter level, click No.

    NOTE: To prevent double costs, Axiom only allows one cost model per entity per period to be summarized to encounter.
    Create a blank model

    Select this option to create a new cost model from scratch.

    NOTE: This option only appears when create a new cost model.
    Create using an existing model

    Select this option to create a new model based off an existing cost model.

    NOTE: This option only appears when creating a new cost model.
    Select a cost model

    Select the cost model in which to base the new cost model.

    NOTE: This option only appears when creating a new model from an existing model.
    Name*

    Type a unique name for the cost model.

    TIP: We recommend using a name that indicates the period in which the costing process takes place. For example, Costing 2020 or Costing 2020 Q1.
    Description Type a description for the cost model.
    Start date*

    Select the start year and month for which to process.
    End date

    Select the end year and month (within the same fiscal year) for which to process.

    NOTE: You cannot select a date that is more than 12 months outside of what you selected in the Start Date field.

    Entity Select the entities in which to apply the cost model.

  3. Complete the following fields, and click Save:

    This main purpose of this dialog is to identify the reference table versions you want the cost model to use for processing. If you want to create a new table version for any of the areas listed (departments, accounts, reclasses, etc.), you can name the new version here first, and as you go through the cost model setup process, you configure the new tables.

    For example, let's say you want to create a new Departments dimension table to be used only for a new east coast region cost model. You might name the table "Departments - East Coast" in this dialog. When you get to the Departments dimension area of the cost model setup process, the system will default to the new "Departments - East Coast" table you created. You can then add or remove departments, as needed, to support the cost model. If you are not yet sure if you are going to need a new table, you can always create a new table later during the cost model setup process.

    Field Description
    Department*

    From the drop-down, do one of the following:

    • Select an existing department version.

    • Create a new department version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Account*

    From the drop-down, do one of the following:

    • Select an existing account version.

    • Create a new account version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Cost category*

    From the drop-down, do one of the following:

    • Select an existing cost category version.

    • Create a new cost category version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Cost method exclusion

    From the drop-down, do one of the following:

    • Select an existing cost method exclusion.

    • Create a new cost category version by doing the following:

      1. Select Create new version.

      2. In the Name* field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Direct to encounter

    From the drop-down, do one of the following:

    • Select a direct to encounter definition version.

    • Create a new direct to encounter definition version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.
    Micro

    From the drop-down, do one of the following:

    • Select an existing microcost definition version.

    • Create a new microcost definition version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Use transaction microcost?

    Do one of the following:

    • To use transaction microcost in this cost model, click the toggle switch to Yes.

    • To not use transaction microcost in this cost model, click the toggle switch to No.
    Markup

    From the drop-down, do one of the following:

    • Select an existing markup group definition version.

    • Create a new markup group definition version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    RVU

    From the drop-down, do one of the following:

    • Select an existing RVU version.

    • Create a new RVU version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Use provider RVU?

    Do one of the following:

    • To use provider RVU when processing this cost model, click the toggle switch to Yes.

    • To not use provider RVU when processing this cost model, click the toggle to No.
    Reclass*

    From the drop-down, do one of the following:

    • Select an existing reclass definition version.

    • Create a new reclass definition version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Allocations*

    From the drop-down, do one of the following:

    • Select an existing allocation definition version.

    • Create a new allocation definition version by doing the following:

      1. Select Create new version.

      2. In the Name field, type a unique name for the version.

      3. In the Description field, type a description for the version.

      4. Click Set.
    Use simultaneous equations to allocate department costs?

    IMPORTANT: We recommend that you first review the Understanding simultaneous equations section below before setting this option. If you choose to implement this feature, please consult with one of our Syntellis Implementation Consultants or Syntellis Support to ensure you understand the implications.

    Do one of the following:

    • To enable simultaneous equations, click the toggle switch to Yes.
    • To use single-step down, click the toggle switch to No.

  4. Continue setting up the cost model by configuring the following areas:

Understanding simultaneous equations

The simultaneous equation (SE) method of cost allocation provides a more accurate method of allocating department costs. When processing allocations, the system places the records and allocation rules into a matrix, and then system processes them together. If your organization decides to use SE, you need to define the costing allocation rules to take this into account. For this reason, we recommend that you do not switch back and forth between SE and single step down because it could result in inaccurate data.