Greetings to all readers of this great platform, in this opportunity I come to share with you the relevant aspects of cost accounting, when starting a new business, as many of us know the beginnings are always difficult, that is why we must conduct an in-depth study of the market or business we want to start, for this we must take into consideration all the factors involved in this process, mainly the costs of it.
The image used is from Public Domain, Author: Goumbik, 2017
To have a better idea of the subject, it is necessary to develop the definition of cost accounting, which, according to Ramirez, D. (2008) states that "cost accounting consists of the recording and control of manufacturing operations, and aims to determine the unit cost of production, which is the basis for setting the selling price".
Taking into consideration the above definition, it can be considered that we must accurately determine the costs that we will require to make the products of our new business, or the costs required to provide a service, it is very important to carry out these controls in order to avoid losses, which in a start-up business could quickly lead to the closure of its operations.
In order to be able to make the corresponding evaluations, we must be clear about what a cost is, According to Polimeni, Fabozzi and Adelberg (1994), cost is defined as "the value sacrificed to acquire goods or services, which are measured by reducing assets or incurring liabilities at the time benefits are obtained".
Taking into consideration what is defined in the previous paragraph, it is necessary to have clear each one of the costs to acquire the goods for the manufacture of our product or the provision of service, in case that there is no clarity of these costs, it is very possible that the new businesses generate losses quickly, and without having any type of profitability.
The image used is from Public Domain, Author: Mahamed Hassan, 2019
Cost accounting helps us to determine each cost incurred in a production process or in the provision of a service, this helps us to make our business run in the best way, this is one of the main conditions that we must be clear when we are going to start our new business, thus making it durable over time, and with great profitability, which ensures that it is a thriving business, we must always be clear about all the factors that may be involved.
- Polimeni, Fabozzi y Adelberg.(1994) Contabilidad de Costos. Conceptos y Aplicaciones para la Toma de Decisiones Gerenciales. Tercera Edición. McGraw-Hill Interamericana, S.A. Bogotá, Colombia.
- Ramírez, D.(2008). Contabilidad administrativa. 6ta edición McGraw-Hill.