Abstract:

Competition is very heavy in today’s business environments due to globalisation. In order to survive and be successful, businesses try hard to use resources they own in the most productive manner. The most important resource they own is information, which is a strategic vitality element. Cost accounting, which emerged and developed beginning from the early 19TH century, was a powerful instrument for to determine and watch the costs related with products and services that are being produced, and to gather the data necessary to bridge the gaps between the aforementioned costs and decisions the managements would have to make. On the other hand, changes which took place within the production environments by the end of 20TH century, increase of computers’ and automation systems’s presence raised the expectations from accounting in terms of relevant data. Cost accounting failed to satisfy the increasing needs for data in the increasing competition environment. Because of all these reasons a new cost approach has emerged, which enables measuring success of businesses, and produces more accurate, more error-free and more reliable data. This approach is “Strategic Cost Management”, which helps businesses create forward strategies and gather necessary data. The aim of this study is to review historical development of cost accounting within accounting information system and to tell the process of conversion from cost accounting into strategic cost management.

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