Cost Accounting

In an exceedingly aggressive market, companies are always looking for ways to increase their productivity, and to cut and manage their costs. Cost accounting offers a true depiction of the connection between detailed costs and exact outputs because it follows the resources as they travel through the business. The planning, budgeting and forecasting (PBF) procedure is something that is accomplished through the finance department. Doing a planning, budgeting and forecasting plan can take a lot of time can be misinterpreted, and many departments do not like these reports (What’s, 2013). In order to understand the direction and financial plans/vision/objectives of an organization financial statements/planning is a necessary function. A company

All costs should be included when determining the full fee to be billed. In a patient’s care there can be many departments such as radiology, pharmacy, ER department, accounting department, administration cost, should be figured in as all aspects of the services offered are essential to the operation of the hospital (What’s, 2013).

When determining the costs for the patient the length of the stay, and any procedures should be factored in. Any additional services provided such as pharmacy or radiology should be factored in as well as the pre-determined DRGs, or any specific type of day surgery. For billing purposes all costs should be known patient, department and the procedure levels. When hospitals do not have accurate cost information they are in danger of not charging the correct amounts for their procedures. This can affect the total operations of the hospital along with the long-term plans. Accurate cost of services provided is essential in the ability to provide quality care, and being a hospital that has a sound financial

Upper management use it to forecast out their plans, internal departments use them to determine their budgets, and to plan future budgets based on their present needs. Investors and stock holders use the financial statement to determine the financial standing of the company to determine if they will be investing in the company or not. Banks use this information to determine if they will lend money or decline to. Owners to investors use these financial statements to understand where the company is and where it is going, is there to much debt for the company to make a profit? Can the company make it in a tough financial world? This is what people are looking for when they review financial