Industrial accounting is an accounting approach used by companies mostly in the industrial, manufacturing and other types of product transformation.
This type of accounting includes all processes included in the activity of a commercial company related to the industry , as well as other models of manufacturing services.
In that sense, this accounting vision can be identified with companies focused on production as a central element of their economic activity. For this reason, any business stage related to the control of costs and expenses related to manufacturing are the subject of study of this branch.
Correct industrial accounting must answer about the cost of producing each unit of product for the company, in order to be able to obtain the corresponding benefit after its sale.
Main objective of industrial accounting
Industrial accounting seeks knowledge and control at all times of the expenses originated with the business model that follows a firm dedicated to productive tasks. In this area we include the manufacture of goods, the treatment of natural resources or other raw materials or the assembly of products already created.
These types of costs to be accounted for include purchases from suppliers, inventory planning necessary for previously estimated production levels, the necessary labor or administrative costs for the optimal operation of the company.
Highlights of industrial accounting
In addition to serving as a reflection of the study of production costs and their economic impact on the company, industrial accounting deals with other points:
- It is an accounting form very based on the fulfillment of previous budgetsand advance planning
- It includes expenses derived from the marketing strategyand the subsequent placing on the market of manufactured products, even from the point of view of producers and wholesalers
- It has a fundamental role in the design of future budgets, by providing data on periods of activity of the company and the need or not for changes in the forecast of purchase of raw materials, hiring workers, rent or purchase of spaces, etc.