Factors To Consider When Installing a Cost Accounting System
Some of the following factors to consider when installing a Cost Accounting system:
| 1.0 The objectives and expectations of managements for installing it should be identified. How simple or complex will depends on the objectives of management |
| 2.0 The need to properly understand the nature of business, its technical aspects, products, process flow & methods and stages of productio |
| 3.0 The study of the organization structure- its departments or division to determine the scope of responsibilities of the various executives/head of department/division |
| 4.0 All the relevant parties/staff need to be involved right from the start until the date of delivery of the system |
| 5.0 The details of the cost records should be carefully worked. Also the degree of accuracy of the data to be supplied by the system should also be determined |
| 6.0 The costing system to be installed should be easy to understand and simple to operate |
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| 7.0 All the forms for example the recording workers’ costs should be standardized , consistent and preferably automated with minimum clerical intervention. |
| 8.0 The need to have regular reconciliation of costs and financial accounts if they are maintained separately |
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