Record to report / R2R – General Accounting – Cost Accounting

We had listed the process components for a general accounting – consolidation process.

http://faoblog.com/processes-record-report-r2r-general-accounting-consolidations-3/

Another unnoticed process is cost accounting. I have seen this outsourced in a very limited number of organizations.

Why unnoticed? Primarily because, most of the time, the mechanical components of a CFO office operations are targeted for cost reduction. They are treated as overheads, and hence the focus gets limited there only.

On the other side the costing process contributes directly to the manufacturing cost, and hence is absorbed in the product cost. Thus it does not really become an overhead, and goes unnoticed.

I a prior employment, I had recommended the offshoring of this process, from about eight plants of a client, of course, they maintained the decision making, but they transitioned the basic process, about 2 resources per plant. When we consolidated the work at offshore, we were finally able to execute this work with just 10 resources, as against 16 that they had.

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