Cost accounting is the process of tracking and analyzing a business’s expenses in order to inform decision-making. It is used to understand how much money is going into operations and where it comes from, allowing a business to optimize its spending and improve profitability. Cost accounting involves a range of activities, including collecting data on costs, analyzing this data, forecasting future expenditure and setting prices for services and products. When done properly, cost accounting can lead to increased efficiency and reduced costs, making it an invaluable tool for businesses of all sizes.