The Role of Cost Accounting in Budgeting and Decision-Making in the Service Industry

Abstract

Cost accounting plays a critical role in supporting effective budgeting and informed decision-making, particularly in the service industry where intangible assets and variable costs are prominent. This study aims to examine the impact of cost accounting practices on budgeting processes and decision-making efficiency within service organizations. The research adopts a mixed-methods approach, combining quantitative data collection through structured surveys distributed to 150 financial managers and qualitative insights from interviews with 20 senior accounting professionals across the service sector in Thailand. The results reveal that organizations employing advanced cost accounting techniques, such as activity-based costing (ABC) and real-time financial analysis, exhibit higher budgeting accuracy and improved decision-making capabilities. These practices enhance resource allocation and cost control, ultimately leading to improved organizational performance. Additionally, the findings highlight the need for continuous training of financial professionals and the adoption of digital tools to keep pace with industry demands. The study concludes with recommendations for service organizations to integrate advanced cost accounting systems and provide ongoing professional development to accounting staff. Policymakers and industry leaders are encouraged to support technological adoption in financial operations to ensure sustained competitive advantage.