What are the benefits of using cost accounting reports and dashboards for decision-making?

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Cost accounting is a method of tracking and analyzing the costs of producing goods or services, such as materials, labor, overhead, and quality. It helps businesses to measure their efficiency, profitability, and performance, and to make informed decisions based on accurate and relevant data. One of the tools that cost accountants use to present and communicate this data is cost accounting reports and dashboards. These are visual and interactive displays of key cost information that can be customized and updated according to the needs and preferences of the users. In this article, we will explore some of the benefits of using cost accounting reports and dashboards for decision-making.

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Sachin Gaikwad

Versatile Expert in Accounts || Finance || Operations || Supply Chain Finance || Commercial and ERP, Delivering Results…
Benjamin W.

Strategic Finance Professional
Tamara Garza

Epicenter LLC.

1 Improve cost visibility

One of the main benefits of using cost accounting reports and dashboards is that they provide a clear and comprehensive view of the costs incurred by different products, processes, departments, or activities. By using various filters, dimensions, and metrics, you can drill down into the details of your cost structure, identify the sources of variance, and compare the actual costs with the budgeted or standard costs. This way, you can monitor and control your costs more effectively, and spot any issues or opportunities for improvement.

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Tamara Garza

Epicenter LLC.
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One of the main variables you might find would be the discrepancies on the Material bucket, from there you can track back, if that was either a quality issue on the material, to keep an eye over the suppliers, or if it's inefficiency of the operator/employee so you keep training your crew members, or if it's the machinery that needs maintenance. Information and visibility is the key for success.

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Shantanu Mehta

Business Accountant, Big-picture Evaluator, Numerical Specialist, Costing expert.
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Cost accounting enables one to understand what costs gets incurred and how they are apportioned among different projects and product lines. This can further be investigated by delving deeper into the cost centers. Lastly, cost accounting helps gauge operational performance and efficiency.

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2 Enhance cost analysis

Another benefit of using cost accounting reports and dashboards is that they enable you to perform various types of cost analysis, such as cost-volume-profit analysis, break-even analysis, margin analysis, or variance analysis. These analyses help you to understand how your costs behave in relation to your sales volume, price, or output level, and how they affect your profitability and competitiveness. You can also use cost accounting reports and dashboards to conduct what-if scenarios, sensitivity analysis, or benchmarking, to evaluate the impact of different assumptions, changes, or alternatives on your costs and profits.

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Vijay Kumar Kothawar

Optum || AI/ML || Business Analytics || Product Management || SCMHRD || Impact Consulting || Fresh Purple || Software Engineer || Power BI Analyst
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I respect all the opinions given and giving my additional inputs here. It helps in forecasting the revenue and profits for the next months, quarters, years which will help in decision making and aligning goals to it. It can show seasonality and other trends. We can also generate individual monthly invoices from a centralized dashboard. It can also be used for taxation purpose.

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Shantanu Mehta

Business Accountant, Big-picture Evaluator, Numerical Specialist, Costing expert.
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Delving further into the costs renders insights about markups and margins. Corporations can identify high-margin and low-margin items. This helps enterprises in decision-making. Among the most obvious would be to reduce or shut down the low-margin items. Another is that costing reports also pave the way for budget performance through #varianceanalysis. Finally, costing enables to understand #breakevenpoint or #BEP and even assists with #CostBenefitAnalysis.

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3 Support cost optimization

A third benefit of using cost accounting reports and dashboards is that they support your cost optimization efforts, by providing you with actionable insights and recommendations based on your cost data. You can use cost accounting reports and dashboards to identify and eliminate waste, inefficiency, or non-value-added activities, to reduce your variable or fixed costs, or to optimize your product mix, pricing, or capacity utilization. You can also use cost accounting reports and dashboards to align your cost strategy with your business objectives, customer needs, and market conditions, and to measure and communicate your cost performance and value creation.

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Shantanu Mehta

Business Accountant, Big-picture Evaluator, Numerical Specialist, Costing expert.
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Once the analysis gets done, next is working with cost cleansing. Now, what do I mean by cleansing? It means to work strategies and ideas to eliminate wastage, especially abnormal, identify non-valuable items or products and attain the maximum possible capacity utilization. This shall help achieve optimal scenario where profit margins can get maximised and variables and fixed costs minimised.

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4 Facilitate cost communication

A fourth benefit of using cost accounting reports and dashboards is that they facilitate your cost communication, by presenting your cost data in a clear, concise, and engaging way. You can use cost accounting reports and dashboards to share your cost information with various stakeholders, such as managers, employees, customers, suppliers, or investors, and to explain the rationale and implications of your cost decisions. You can also use cost accounting reports and dashboards to foster collaboration and feedback among your cost team and other functional areas, and to promote a culture of cost awareness and accountability.

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Sachin Gaikwad

Versatile Expert in Accounts || Finance || Operations || Supply Chain Finance || Commercial and ERP, Delivering Results for Top Organizations ???? ?????? ???? ????Mumbai Univ. Alumni ??
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A great tool /initiative of Teamwork. Through these communications, all the stakeholders are apprised of the cost /project growth /trend. All are involved in project/cost discussions which allow us to take all agreeable solutions, and decisions & ready for the future. All come on the same page leading to better collaboration among the team, resulting in effective cost management & great execution.

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Roberto C.

Analista de Custos e Or?amentos | Analista de Custos Industrais | Budget | Forecast | Forma??o de Pre?os
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Tomar decis?es conhecendo o andamento dos negócios norteia as inten??es e calibra o feeling. Saber o saldo bancário e o lucro líquido, apenas, n?o s?o suficientes. Posso estar tirando dinheiro do caixa da empresa e realizando lucros econ?micos para longo prazo. Conhecer as demais métricas da companhia e integrar todas as informa??es em planilhas inteligíveis e/ou dashboards dinamiza a leitura e tomada de decis?es.

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5 Simplify cost reporting

A fifth benefit of using cost accounting reports and dashboards is that they simplify your cost reporting process, by automating and streamlining the collection, processing, and presentation of your cost data. You can use cost accounting reports and dashboards to access and update your cost data in real-time, from any device or location, and to customize and configure your cost reports and dashboards according to your preferences and requirements. You can also use cost accounting reports and dashboards to integrate and consolidate your cost data from different sources, systems, or formats, and to ensure the accuracy, consistency, and reliability of your cost information.

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Sachin Gaikwad

Versatile Expert in Accounts || Finance || Operations || Supply Chain Finance || Commercial and ERP, Delivering Results for Top Organizations ???? ?????? ???? ????Mumbai Univ. Alumni ??
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Agree . Real-time data integration/analysis of cost data received through multiple sources helps track the cost which again helps in analyzing the trend & track project growth . Allows to take preventive/remedial/suitable steps.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Benjamin W.

Strategic Finance Professional
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Improving cost visibility:See costs by product, process, department, or activity, identify variances, and compare actual to budgeted costs. Tracking trends:Identify and track trends in costs over time to spot potential problems or opportunities. Reducing waste and inefficiency: Identify and eliminate waste and inefficiency to reduce costs and improve profitability. Example:A manufacturing company uses a cost accounting dashboard to track the cost of each product they produce. This information is used to set prices, identify the most profitable products, and make decisions about which products to discontinue.

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What are the benefits of using cost accounting reports and dashboards for decision-making?

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1 Improve cost visibility

2 Enhance cost analysis

3 Support cost optimization

4 Facilitate cost communication

5 Simplify cost reporting

6 Here’s what else to consider

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