Ensuring Financial Success For Your Business

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Can you point your company in the direction of financial success, step on the gas, and then sit back and wait to arrive at your destination?

Not quite. You can’t let your business run on autopilot and expect good results. Any business owner knows you need to make numerous adjustments along the way – decisions about pricing, hiring, investments, and so on.

So, how do you handle the array of questions facing you? One way is through cost accounting.

Cost Accounting Helps You Make Informed Decisions

Cost accounting reports determines the various costs associated with running your business. With cost accounting, you track the cost of all your business functions – raw materials, labor, inventory, and overhead, among others.

Note: Cost accounting differs from financial accounting because it’s only used internally, for decision making. Because financial accounting is employed to produce financial statements for external stakeholders, such as stockholders and the media, it must comply with generally accepted accounting principles (GAAP). Cost accounting does not.

Cost accounting allows you to understand the following:

• Cost behavior. For example, will the costs increase or stay the same if production of your product goes up?

• Appropriate prices for your goods or services. Once you understand cost behavior, you can tweak your pricing based on the current market.

• Budgeting. You can’t create an effective budget if you don’t know the real costs of the line items.

Is It Difficult?

To monitor your company’s costs with this method, you need to pay attention to the two types of costs in any business: fixed and variable.

Fixed costs don’t fluctuate with changes in production or sales. They include:

• rent
• insurance
• dues and subscriptions
• equipment leases
• payments on loans
• management salaries
• advertising

Variable costs DO change with variations in production and sales.

Variable costs include:

• raw materials
• hourly wages and commissions
• utilities
• inventory
• office supplies
• packaging, mailing, and shipping costs

Tip: Cost accounting is easier for smaller, less complicated businesses. The more complex your business model, the harder it becomes to assign proper values to all the facets of your company’s functioning.


If you’d like to better understand the ins and outs of your business and create sound guidance for internal decision making, you might consider cost accounting.

Let’s meet on TaxConnections to evaluate your business from top to bottom and determine the real cost of each component. With that as a foundation, we can help you draft budgets, adjust pricing, keep an appropriate level of inventory, and much more.

Dan has been preparing tax return for US Taxpayers and Expatriates since 1998 beginning with US military and Embassy mission personnel in Bangkok, Thailand. He has always loved math and took business accounting at City U. in Seattle Washington. Dan worked at Clint Gordon & Associates (Accredited Tax Consultant) were he gained his foundational knoledge of the US taxing system.

Dan has been studying tax preparation and tax law ever since increasing his skill and knowledge of the tax preparation business accordingly, Dan is known in many circles around the globe as an Expatriate Tax Expert. His book entitled “The Complete US Expat Tax Book” has recently been published and is available on Kindle, Amazon and booksellers around the world.

Thru the years, Dan has fought many battles with the Internal Revenue Service as well as various state taxing departments with great success in helping lower and or eliminate his clients tax debts.

Dan Gordon and his staff enjoy the work they do from the simplest 1040EZ to the most complex corporations, with the goal that no client should pay more tax than legally required.

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