Accounting is the system of recording and summarizing commercial and financial transactions and analyzing, verifying and reporting the results; (Merriam Dictionary, 2012). Cost accounting is described as the overall cost evaluation approach of when the company evaluates the cost associated with the business. Cost accounting is the identification, measurement, collection, analysis, preparation and reporting of financial information (Khan, 2010). In this article I will discuss why cost accounting is important for businesses and what role it plays in their success. I will also discuss the different cost accounting methods and how they are used? How does budget management help run a business? what are the elements of a budget and how they are constructed. Companies use cost accounting to help the manager illustrate potential areas to reduce costs and processes for services and goods, it describes how goods and services should be priced to reflect their true cost (Conway-Schempf & Ph, 2001). Cost accounting is the process of accumulating, measuring, interpreting and reporting cost information relevant to the company's shareholders. Managers and management use cost accounting to help justify the ability to help reduce costs to the company in order to increase the company's profit. Internal use, compared to tools for external use, allows users such as financial accounting, cost accounting who do not need to follow general accepted accounting principles (GAAP) because they use a more practical type of accounting. The Importance of Cost Accounting", 2011). It also gives managers a good idea of ​​what the actual cost of processes, part... middle of paper... employees and customers to make the company profitable .Works CitedAccounting Tools. (2012). Process costing/process cost accounting. Conway-Schempf, N., & Ph, D. (2001: A course module on integrating environmental and social costs. Financial terms). . (2012). Retrieved from http://www.finance-lib.com The importance of cost accounting (2011) How cost accounting serves the management process within an organization and how cost accounting is typically used.Mork, R. (2012).Cost accounting basics.Q-finance (2009, February 3). continuous learning forum]. Retrieved March 13, 2012, from Welingkar Institute of Management: www.slideshare.com.