Installing a costing system and problems that can arise

          

Installing a costing system and problems that can arise


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Installing a costing system and problems that can arise posted by Rajani Sharma

What things would you take into consideration while installing a costing system?

Following things should be taken into consideration while installing a costing system:

-Nature of the Product is a very important deciding factor in installing an effective costing system.

-Nature of the Organisation should be considered before installing costing system.

-Objectives of the Organisation should be met with the installed costing system.

-Manufacturing Process: Before installing the costing system the technicalities of the manufacturing process should be studied carefully.

-Technical Details of the business must be studied before introducing new costing system.

-The system should be informative and simple. The system should be simple and easy to use in order to maintain various cost records.

-Reporting Systems: The costing system should be designed in such a way that reports are generated in a proper way to facilitate the cost control decisions.

-The costing system should be elastic and capable of adapting according to the changing environment.

What problems you may face while installing a costing system?

While installing a Costing System an Organisation may face the following problems:

-Lack of Support from Top Management Resistance and non cooperation from the Staff

-Shortage of trained staff

-Non suitability for the nature of product and nature of business

-The cost involved in installing this system may be too high.

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