TrueCost terminology

Term	Description
Department	Division of an organization that has accountability for the expenses it incurs. A TrueCost configuration requires one of the finance enterprise group dimensions to be set up as a department structure. A department's structure includes a hierarchy of an organization's departments. This hierarchy is defined by the reporting requirements of an organization. For example, a departments hierarchy in a healthcare organization can group nursing departments together by area of specialty. TrueCost allocates expenses from support or indirect departments to patient-servicing or direct departments, and to cost objects within direct department.
Cost Object	A product or service performed by a department for which there is interest in determining the complete cost necessary to produce or deliver. TrueCost is focused on patient-related activities. For example, cost objects can be patient activities and procedures from the Electronic Health Record (EHR) such as these: Test exams Surgical procedures Images Nursing tasks Prescriptions dosed Examinations Office visits TrueCost allocation rules allocate expenses to cost objects within patient-servicing departments. Cost object structures are defined in a finance enterprise group dimension.
Utilization Ledger	Ledger that contains transactions generated by TrueCost allocations that use the actual quantity of weighted driver events for full absorption costing.
Capacity Ledger	Ledger that contains transactions generated by TrueCost capacity allocations that use the practical capacity of weighted driver events for capacity-driven, activity-based costing.
Cost Breakdown Structure	A cost breakdown structure is a hierarchical structure of posting and summary accounts that is grouped by resource type. A cost breakdown structure is often a subset of the chart of accounts, including only those accounts that are necessary for costing allocations and reporting.
Driver	Name and description of a unit of measure that determines the quantity at which a resource is utilized for a cost object. For example, count, duration, or volume. Drivers are used to allocate variable and indirect costs to production activities or output. Indirect costs and direct costs are required to compute the full cost of production.
Driver Event	Value of a driver used for a cost object during a patient-related event.. For example, number of procedures performed, where procedure is the cost object and procedure number is the driver; or volume of supplies utilized, where the supply is the cost object and supply volume is the driver.
Driver Data	Value of a driver used for a cost object based on the date on which it is effective.
Driver Weight (Weight)	Name and description of a relative weight to allocate expenses to departments or cost objects based on a measure of resource intensity. For example, weights can be created based on Relative Value Units (RVUs), MS-DRG weight values, average duration, standard unit costs, charges, or capacity cost rates.
Weight Data	Value of a driver weight used for a cost object. For example, if the driver weight is RVU, the weight data specifies the RVU values for each cost object.

Department

Division of an organization that has accountability for the expenses it incurs. A TrueCost configuration requires one of the finance enterprise group dimensions to be set up as a department structure. A department's structure includes a hierarchy of an organization's departments. This hierarchy is defined by the reporting requirements of an organization. For example, a departments hierarchy in a healthcare organization can group nursing departments together by area of specialty. TrueCost allocates expenses from support or indirect departments to patient-servicing or direct departments, and to cost objects within direct department.

Cost Object

A product or service performed by a department for which there is interest in determining the complete cost necessary to produce or deliver. TrueCost is focused on patient-related activities. For example, cost objects can be patient activities and procedures from the Electronic Health Record (EHR) such as these:

Test exams
Surgical procedures
Images
Nursing tasks
Prescriptions dosed
Examinations
Office visits

TrueCost allocation rules allocate expenses to cost objects within patient-servicing departments. Cost object structures are defined in a finance enterprise group dimension.

Utilization Ledger

Ledger that contains transactions generated by TrueCost allocations that use the actual quantity of weighted driver events for full absorption costing.

Capacity Ledger

Ledger that contains transactions generated by TrueCost capacity allocations that use the practical capacity of weighted driver events for capacity-driven, activity-based costing.

Cost Breakdown Structure

A cost breakdown structure is a hierarchical structure of posting and summary accounts that is grouped by resource type. A cost breakdown structure is often a subset of the chart of accounts, including only those accounts that are necessary for costing allocations and reporting.

Driver

Name and description of a unit of measure that determines the quantity at which a resource is utilized for a cost object. For example, count, duration, or volume. Drivers are used to allocate variable and indirect costs to production activities or output. Indirect costs and direct costs are required to compute the full cost of production.

Driver Event

Value of a driver used for a cost object during a patient-related event.. For example, number of procedures performed, where procedure is the cost object and procedure number is the driver; or volume of supplies utilized, where the supply is the cost object and supply volume is the driver.

Driver Data

Value of a driver used for a cost object based on the date on which it is effective.

Driver Weight (Weight)

Name and description of a relative weight to allocate expenses to departments or cost objects based on a measure of resource intensity. For example, weights can be created based on Relative Value Units (RVUs), MS-DRG weight values, average duration, standard unit costs, charges, or capacity cost rates.

Weight Data

Value of a driver weight used for a cost object. For example, if the driver weight is RVU, the weight data specifies the RVU values for each cost object.

Terminology