cost accounting software - what is

This can be described as the process of accumulating, measuring, analyzing , interpreting and communicating information costs that is both useful and relevant to internal and external stakeholders of a business entity once. External stakeholders are those who have a financial interest in a business or company . Banks, for example (loans ) , financial houses (mortgages ) , investors (investment ) , etc. Internal stakeholders are companies or entrepreneurs, managers , division heads , etc.

One of the many benefits of cost accounting is to transform data into information , knowledge and wisdom on the activities of a business entity that is useful for:

Performance Measurement
reduce or control costs
determination of rates and prices of goods and services
decide to authorize , modify or discontinue any program or activity
Another advantage is that information about the programs and activities of the costs can be used as a basis for estimating future costs in preparing and reviewing budget requests . Once approved and executed budgets , cost information is useful feedback on performance. In addition , costs can be compared with the known benefits or assumptions to identify value-added activities that do not add value . Reliable information on the cost of programs and activities is essential to the effective management of the operations of a business entity. Cost accounting is particularly important to achieving the objective of evaluating operating performance . The objective is to improve the efficiency and effectiveness of operations by providing program managers and others based on the costs of timely and relevant performance , enabling continuous improvement in the delivery of outputs and outcomes that the parties concerned . Cost accounting has been with us since the beginning of time to help managers understand the costs of running a business . Modern cost accounting originated during the industrial revolution, when the complexity of managing a large- scale led to the development of systems for recording and tracking costs to help business owners and managers to make decisions.
In the industrial age , at first, most of the costs incurred by a business were what modern accountants call because " variable costs " vary directly with the amount of production. The money was spent on labor , raw materials, energy to run a factory , etc. in direct proportion to production . Managers could simply total variable cost of a product and use it as a general guide for decision making .

Some costs tend to remain the same even during peak periods , unlike variable costs that rise and fall with the workload . Over time, the importance of these " fixed costs " has become more important for managers . Examples of fixed costs include depreciation of tangible fixed assets and the cost of services such as maintenance , tooling, production control , purchasing , quality control , storage and handling , installation supervision and engineering. In the early twentieth century , these costs were of little importance to most companies . However, in the XXI century, these costs are often more important than the variable cost of a product, and assign them to a wide range of products can lead to bad decisions.

In modern accounting costs are assessed in accordance with generally accepted accounting principles ( GAAP). In accordance with GAAP , the principle is to record historical events and assign a monetary value to each event that has occurred . Costs are measured in units of currency by convention. Cost accounting can also be defined as a kind of management accounting which results in the supply chain (the series of events in the production process small business solutions , together , result in a product) into financial values.

In conclusion, for any business - from the smallest to the largest multinational trading company - to be successful is the use of the concepts and practices of cost accounting required. Provides essential information for administrators product , service costing and planning and control client and . The focus is on how they could help managers make better decisions . For this reason , companies and businesses hire accountants cost and full members of the teams that make decisions only data providers .