Cost Accounting
The corporate world has changed massively in recent decades. International markets have led companies to global value creation stages in production, research and development, sales and logistics, as well as in administrative areas. Since the 1960s, cost accounting has been an effective controlling tool for illustrating the increasingly globally organized business units and functions and making consistent group objectives controllable.
The aim of effective cost accounting is to achieve full transparency regarding the efficiency of value creation within the company and the success of the various business units in the different market segments, as well as to support the pricing approach.
Cost accounting as an effective management tool
Due to heterogeneous controlling structures, cost and profitability calculations within a company or between group units are often difficult to compare. We believe that the following measures and requirements must be taken into account when implementing effective cost accounting.
Effective cost unit accounting creates additional control views
The derivation of a plan for individual cost points must be closely linked to corporate responsibilities. The development of a consistent profitability analysis for individual profit centers, business units, product groups and segment layers must be dovetailed with the corporate strategy and the management views derived from it. Depending on the individual company situation, it is advisable to set up a contribution margin accounting system or to implement a full cost approach.
Efficient cost type accounting relieves the burden on accounting and creates comparability
Cost type accounting is usually mapped using the chart of accounts. It is important to consider what level of account granularity is necessary for efficient accounting and effective management. Group-wide, harmonized charts of accounts facilitate intra-group comparability.
Transfer prices create important incentive mechanisms within the organization
Transfer prices for internal cost allocation between business units and departments must be selected with regard to both tax requirements and their control impulse or incentive mechanism. Internal functions and services must compete with the services and prices on the "free market".
Transparent allocation keys and allocations create acceptance of the controlling approach
The use of allocation keys and allocations of overheads often involves extensive internal discussions about the "polluter pays principle". Open and transparent communication can significantly increase acceptance of the controlling approach. If overhead costs cannot be allocated in a reasonable way or can only be allocated in a very general way, partial cost and contribution margin views are often the better control alternative.
Integrated ERP systems increase efficiency and added value in the administrative area
A close connection of the quantity and value flows from the logistics processes (purchasing, sales, accounting, planning, production and supply chain) by using integrated ERP systems reduces transactional activities and increases the efficiency of more complex cost accounting approaches. Modern ERP systems allow, for instance, the parallel mapping of the product business for standard products and the system, solution or service business.
Modern business intelligence systems support operational activities and reporting
The use of BI systems can support both operational controlling and the final reporting. For example, target/actual comparisons can be visualized automatically or scenarios and forecasts can be docked to the actual figures from cost accounting. In addition to the use of supporting IT systems, the creation of the necessary database is critical to success.
We support you in the implementation and sustainable anchoring of your cost accounting and control concept
We offer extensive experience in the introduction and sustainable anchoring of cost accounting and control concepts. Our approach is holistic - with everything from project initiation to the transfer of the solution into operation. With our in-depth technical know-how and our understanding of the interaction between specialist departments and IT as well as our change management expertise, we will support you in the successful and secure implementation of your projects.
Please do not hesitate to contact us if you are interested or have any questions.
