Aims to track and manage the expenses related to IT services provided by an organization. By doing so, an organization can conduct financial analyses to assess the effectiveness of IT service provision and identify areas where cost optimization is possible. This financial transparency also assists management in making informed decisions. Different cost elements, such as hardware, software, labor, and maintenance costs, can be utilized to manage IT accounting.
Any type of purchase that would have a residual value, such as hardware and building infrastructure.
Day-to-day recurring expenses, such as rental fees, monthly electrical invoices, and salaries.
Any costs that are directly attributed to one single or specific service or customer. A typical example would be the purchase of a dedicated server that cannot be shared and is needed to host a new application for a specific service or customer.
One specific service provider needs to be distributed among several customers in a fair breakdown. An example is the cost associated with a Local Area Network to which every customer is connected. The breakdown could be done using the total number of users per customer or the total amount of bandwidth usage per customer to accurately distribute the cost of providing this service.
Any expenses established for long periods of time like annual maintenance contracts or lease contracts. These expenses do not vary in the short term.
Any expenses that vary in the short term based on the level of services provided, resources consumed, or other factors. For example, energy costs are variable based on the amount consumed.