Cost accounting systems provide information about recording and tracking costs for products and services. The objective is to ensure that relevant information is available to business owners and managers for decision making, planning and control.
Good record keeping is essential for cash management to determine money owed to creditors for purchases and money to be collected from debtors. A weekly or monthly cash flow report is necessary to ensure that the business does not run out of cash!
Costing involves identifying fixed costs such as rent, electricity, insurance etc. and variable costs which depend on the level of income/sales derived by the business. Each business has specific requirements and the best accounting system depends on the type and size of business.
Cost accounting and record keeping includes the following processes:
- Collection of costs from source documents such as invoices & receipts
- Recording and classification of costs in a database – this will depend on the type of business conducted
- Selection of the appropriate cost management system – to capture all expenses
- Preparation and analysis of reports
Tip : keep private and business expenses separately
Should you require further information and checklists related to your business do not hesitate to contact us.
Bridge Accounting & Taxation Services
Ph: 1300 508 631