Cost Accounting
Understand what things really cost: a managerial overlay that reads your posted figures — it never posts itself. Set up cost objects, classify costs into pools, define drivers, and allocate overhead with live previews.
Configure cost accounting
Cost accounting is a managerial overlay — it reads your posted figures to work out true cost, but never posts to the ledger itself. Set the basics first: the reporting period, productive hours a year, rounding, and an optional industry pack for sensible defaults.
Set up cost objects
A cost object is whatever you want to know the cost of — a branch, a project, a product, a service line. Each one binds to a ledger dimension, so the costs already tagged in your journals flow straight through to it.
Classify your costs
The cost catalogue lists your expense accounts and asks one question of each: is it a direct cost, part of an overhead pool, or non-operating? This classification is what builds your overhead pools.
Review cost pools
A cost pool gathers the overhead accounts you classified together, totalling their posted actuals for a period — the indirect cost you’ll spread across cost objects.
Define cost drivers
A driver is the cause-and-effect base that spreads a pool fairly — billable hours, headcount, floor area, deliveries. Each has a kind, a unit, and a source for its numbers.
Allocate costs with rules
An allocation rule spreads one cost pool across the cost objects you choose, in proportion to a driver. A live preview shows exactly how the pool splits before you commit the rule.
Set practical capacity
Practical capacity is what a resource can realistically deliver after normal downtime — not the theoretical maximum. Costing against it keeps the price of idle time out of your unit costs, and surfaces unused capacity instead of hiding it.
Record activity quantities
Activity quantities are the actual driver volumes each cost object consumed in a period — the hours worked, the square metres used, the deliveries made. They’re what allocation rules and overhead application spread costs by.
Set loaded rates
A loaded rate is the true cost of an hour of work — direct pay plus the overhead it carries — for each tier of staff. Enter rates by hand, or seed a starting point from a payroll job grade.
Set overhead rates
A predetermined overhead rate lets you apply overhead as work happens, instead of waiting for the period to close. Set it from a pool’s budgeted overhead divided by its budgeted driver volume.
Review applied overhead
Applied overhead is the rate times the actual activity each cost object ran. This report sets the total applied against the pool’s real cost and shows whether you’ve over- or under-applied for the year.
Review cost cards
The cost card is where it all comes together for a cost object: the expense traced straight to it, the direct labour at loaded rates, the overhead applied to it — set against its revenue to a margin. It’s the answer to “what did this really cost, and did it pay?”
More guides for this module are on the way. Back to documentation