Identification and Management of Quality Costs in Companies

Abstract

Companies implement quality management systems to be more competitive and achieve organizational objectives efficiently; Quality is essential for any type of company and is present in all processes that are designed with the purpose of guiding the company towards a culture of continuous improvement. Because traditional cost accounting does not perform in-depth quality cost analysis, this research develops a methodology that allows companies to identify, quantify, and manage quality costs from an accounting perspective. The methodology used has a cross-sectional approach and analyzes companies as generic entities without focusing on a specific activity or sector, as results a process map is proposed to identify where the main quality costs are located, considering the main activities that can be develop within a company, then a chart of accounts is presented that allows recording the different costs related to quality, and finally indexes are proposed for their management. The method and results are consistent with traditional accounting and operations management. It can be combined with business management tools such as ERP systems. This method can be of special interest to small and medium-sized companies due to the complexity and cost of having ERPs commercial systems that perform this type of analysis.