Process Accounting refers to a series of activities to record and regulate any process-related events occurring within an organization. It is a management approach that aims to register, control, analyze and report business processes in order to adapt those processes to current operational environment and ensure that every process works in the way the organization requires.
The focus of the process accounting approach is put on defining and analyzing process costs. Such an approach offers the following steps in process cost evaluation:
- Identify and record processes currently running in the operational environment
- Define inputs and necessary resources per running process
- Estimate process delivery time
- Calculate individual costs involved in delivering every single process
- Sum up all individual costs to figure out total costs involved in delivering all process
Calculations of individual and total costs help organizations to estimate and count all types of resources required to perform business processes and activities. Process accounting contributes to overall process effectiveness.