Let’s talk about cost accounting. Whether you are a contractor, a consultant, or a manufacturer of widgets, costing is a valuable tool for planning, setting prices, and identifying areas that need improvement.
Sometimes the market dictates prices for a service or item. In that case, costing will let you know which product is the most profitable and which one you are subsidizing. Many people view subsidizing in a negative light, although it is not a bad concept – subsidizing a low priced washer may get you’re an order for a special, very profitable bolt that you wouldn’t have gotten otherwise.
Cost accounting is complex and can require a lot of work. Good software set up correctly will relieve this burden and provide quality analysis reports for managers to use. 
If you work by job or project, the software will allow you to designate the job when entering an invoice to payables. For those in product or process manufacturing, building a bill of materials (BOM) will allow you to capture inventory costs for direct materials and labor as well as assign manufacturing overhead costs for plant utilities, insurance, and salaries.
The BOM will also move these costs from raw materials to work in progress, finished goods, and finally to cost of sales. Internally you will have costing reports for management and externally you will have financial statements showing inventory values and operational results.
Whether you are a make-to-stock manufacturer, a batch-driven chemical manufacturer, or an electronics assembler, there’s a Sage Software Manufacturing Solution that can help your company streamline operations, lower costs, and increase profitability.
Oates & Company can help you select the right Sage Software product for your individual needs, so contact us to get started!
