Accounting Irregularities Corrected Through Proper Data Management
January 14, 2012
Large companies have long had trouble marrying their books to the true costs associated with production of items. This has led to a laissez-faire approach to accounting which basically allows for incorrect data as long as it passes an audit. The article, Explanation of the Topic – Manufacturing Overhead, on Accounting Coach, explains how diligence in accounting methods is more crucial than many believe.
When an item is produced many items go into determining the final price. To be able to accurately understand the true cost of an item from start to finish data from the conception of the item on through the manufacturing and all the way through sales and marketing must be factored into the equation. There are several ways that numbers can match in the end but do not portray an accurate cost to produce.
As the article explains,
“In short, the financial statements can be considered as accurate even with improper allocation to individual products, but management’s needs dictate that (1) the allocations of manufacturing overhead be truly accurate and (2) that the nonmanufacturing costs be accurately assigned to individual products and customers.”
We think that this problem can be completely eradicated by companies adopting new data management solutions that allow high-value product design and manufacturing information to be integrated, thus eliminating expensive inefficiencies in the critical design engineering stages of product design and production.
Catherine Lamsfuss, January 14, 2012
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
