Can Software Solve Your Costing Problems?

Sep 30, 2013

softwareIf you have ever heard any of us speak, or read our blogs about the most common costing mistakes, you will know that my answer to this question is NO! So many software companies claim that their software will help solve your cost accounting issues. I am not saying that some software programs are not possibly better than others. You may face limitations with your current system that require you to think outside the box. You may think a new system would be better, and maybe it would be. But it certainly will not solve all of your problems.

I recently read a blog that was talking about accounting for change orders and how complicated that can be. The blog was written by a software vendor who then went on to say that their software can solve those challenges. Perhaps I am just a skeptic, but I do not see how that is possible. You still have to know what to input and when to do it. Maybe the steps you need to go through are user friendly, but if you are entering the wrong information it will not solve the problem.

As we have said before many software vendors will say this is the best program to use and then when you implement they tell you what they believe is the “best practice”. Every business is different and your costing will be completely different than any other business they have installed the software for. There is no such thing as a best practice. The only thing you need to concern yourself with is what is correct for you, and only you or an experienced cost accountant can answer those questions, not software vendors.

Please do not mistake my concern with software programs not solving your needs for thinking I do not like software programs. I am all for sophisticated systems that can do what you need very easily and quickly. However, I think it is vital for you fully utilize and understand your system and that the parameters are set up correctly. Or unfortunately you’ll be left with that old adage…. garbage in, garbage out!

Categories: Cost Accounting