Accounting Aspects of Cost Management

Abstract

Proper cost management requires appropriate accounting support, which is formed taking into account the specifics of the enterprise's activities, the applied elements of management accounting policy, methods of cost accounting and management, and management needs. The purpose of the study is to substantiate the theoretical, methodological, and accounting aspects of cost management for the development of a model of accounting support for cost management. To achieve this goal, the following methods were used: theoretical generalisation, analogy, analysis, grouping, and a systematic approach. The paper examines scholarly approaches to defining the concept of “cost management”. It has been established that cost management results in management decisions (both current and strategic) being made regarding cost behaviour and optimisation, their impact on cost formation, the efficient use of resources, and the competitiveness of an economic entity. The objectives of cost management are identified, from which specific information outputs are generated, along with the elements of cost management which, in their interrelationship, effectively satisfy management needs and form an appropriate information product. It is substantiated that accounting support for the cost management process is formed individually for each economic entity and is based on the applied cost accounting and cost management methods, which should be classified according to the goals of cost management. It is proposed to combine domestic cost accounting methods (process costing, standard costing, job-order costing) with international cost accounting and cost management methods for effective cost management and to meet the information needs of the management process as a whole. The classification of costs for cost management, encompassing production and non-production costs and costs for the formation of non-financial reporting in line with sustainable development goals, is examined. The significance of lines of communication in the cost management process and the choice of communication channels and mechanisms for verifying the reliability of information are described. A model of accounting support for cost management is proposed, taking into account the elements of management accounting, the application of which will contribute to the formation of high-quality management and non-financial information for management decision-making. The practical significance of the proposed model lies in the possibility of its application by medium-sized and large enterprises across various sectors of the economy for effective cost management.