Costs & KPIs · Intermediate

Create Accounts

Learn how to prepare and create a cost account for maintenance expense tracking, then check the saved record. This lesson covers cost accounts, not cost centers or user login accounts.

Accurate tracking of maintenance expenses is crucial for effective budget management and financial reporting. Creating well-defined maintenance cost accounts in your CMMS allows for precise allocation and analysis of expenditures. This ensures transparency, helps identify cost-saving opportunities, and supports informed decision-making regarding maintenance strategies.

Where it's available and step by step

Step by step in ManWinWin Desktop

1
Open the cost accounts configuration table in the back-office; if you cannot locate it, request the exact route from support@manwinwin.com.
2
Check the existing accounts for the intended account before creating another record.
3
Start a new cost account record using the creation action available in your version.
4
Enter the agreed account identification in the corresponding fields presented by the form.
5
Review any additional required account settings with the person responsible for financial tracking before saving; the supplied references do not specify these settings.
6
Save the account and reopen the saved record to check that its identification matches the agreed account.

Theory and technical background

The Importance of Maintenance Cost Accounting

Maintenance cost accounting is a systematic process of recording, classifying, and allocating costs associated with maintenance activities. It provides granular insights into where money is being spent, differentiating between corrective, preventive, and predictive maintenance costs, as well as spare parts, labor, and external services. This data is vital for evaluating the efficiency of maintenance operations and justifying budgets. ISO 55000 emphasizes the financial aspect of asset management, making robust cost accounting indispensable for compliance and strategic planning.

Distinguishing Cost Accounts from Cost Centers

While often related, cost accounts and cost centers serve distinct purposes. A cost account (or expense account) classifies the type of expenditure (e.g., 'labor costs - mechanical', 'spare parts - electrical'). A cost center, on the other hand, is an organizational unit or department responsible for incurring costs (e.g., 'production line 1', 'fleet maintenance'). Properly linking cost accounts to cost centers allows for a comprehensive view of what was spent (account) by whom or where (center), enhancing financial control and accountability.

Impact on Key Performance Indicators (KPIs)

Accurate cost accounts directly influence the calculation and reliability of various maintenance KPIs. For instance, the total maintenance cost per unit produced or per asset directly relies on precise expense tracking. While not a direct input for MTBF or MTTR, cost data is essential for calculating Cost of Unavailability or Return on Maintenance Investment. Well-structured cost accounts enable organizations to monitor trends, benchmark performance, and make data-driven decisions to optimize maintenance spending and asset lifecycle costs, aligning with EN 13306 principles.

Best practices

Standardize account naming conventions for consistency across all records.
Review and update your chart of accounts regularly to reflect operational changes.
Integrate cost account data with financial systems for seamless reporting.
Train maintenance staff on the importance of accurate cost allocation.

Frequently asked questions

Why is it important to create distinct cost accounts for different maintenance types?

Distinct cost accounts allow you to analyze spending patterns for corrective, preventive, and predictive maintenance separately. This granularity helps in identifying cost drivers, evaluating the effectiveness of each strategy, and reallocating resources more efficiently to optimize overall maintenance costs.

How often should I review my maintenance cost accounts?

It's best practice to review your maintenance cost accounts at least annually, or whenever significant operational changes occur. This ensures they remain relevant, accurately reflect current expenditures, and support your financial reporting needs. Regular review prevents outdated or redundant accounts.

Can maintenance cost accounts help in budgeting?

Absolutely. Historical data from well-structured maintenance cost accounts provides a solid basis for forecasting future expenses. By understanding past spending on labor, parts, and external services, you can create more realistic and accurate maintenance budgets, improving financial planning and control.

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