6 primary goals of a cost management system (CMS)

Crossing all functional areas, a cost management system can be viewed as having six primary goals: 

 (1) develop reasonably accurate product costs, especially through the use of cost drivers (activities that have direct cause-and-effect relationships with costs); 

(2) assess product/service life-cycle performance; 

(3) improve understanding of processes and activities; 

 (4) control costs; 

(5) measure performance; and 

(6) allow the pursuit of organizational strategies. 

First and foremost, a CMS should provide the means to develop accurate product or service costs. This requires that the system be designed to use cost driver information to trace costs to products and services. The system does not have to be the most accurate, but it should match benefits of additional accuracy with expenses of achieving additional accuracy. Traceability has been made easier by improved information technology, including bar coding.