Cost Management - Activities - Job Positions
Cost Management Organization or Setup
Authors
Cost Management Organization or Setup
Activites of Cost Management Process
Cost Management - Decision Making and Implementation
Cost Analysis and cost estimation
Cost Management Information System
Cost Accounting
Cost Objective Statements ( Routine/Periodical and Adhoc/special purpose)
Cost Accounting Books
Cost Voucher Preparation
Operating managers, cost accountants, cost analysts and continuous improvement specialists (industrial engineers) are the four functional specialists involved in cost management process in organizations.
Operations persons take decisions and implement them in carrying out various activities related to operations of purchasing, producing and selling goods or services in which the organization is doing business. Costs are incurred in the process and revenues are earned. These transactions are recorded in vouchers by the operations personnel.
Cost accounting department has the specialist job of collecting all the vouchers and recording them in cost accounting books of account - journal and ledger. Using the information from the ledger, they develop cost statements for various objectives - departments or products or some other cost heads under which cost information is required by the organization for decision making.
Cost management information system will decide who will get access to the books of cost accounting and various statements prepared by the cost accounting department.
Cost analysis is a step conducted using the cost information. The reason for doing cost analysis is decision making. Cost estimating is a part of cost analysis and it is complementary activity. Cost analysis can be done by cost accountants, operations people and specialist cost analysts like cost estimators.
Operations persons which classification includes the CEO of the organization also, now takes decisions based on the cost information and analysis and implements the decisions. The implementation once again gives rise to vouchers and the cycle continues.
Different cycles of very short durations (even as small as an hour) and long periods (plant life cycle period) keep occuring in the cost management process. Certain costs are reported on monthly basis and actions are taken to be implemented over the next month.
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