QUALITY COSTING AS A COMPASS IN QUALITY MANAGEMENT

Abstract

Quality Costing is an accounting method that captures and measures qualityrelated costs providing quality data that can be quite useful for quality improvement and management. In order to become relevant source of data in quality management Quality Costing should be properly implemented. Therefore, the scope of quality cost recording and the usage level of Quality Costing determines its maturity level. The purpose of this paper is to explore whether the maturity of Quality Costing positively affects the application of quality management principles according to the ISO 9001:2015. This study reveals that the Quality Costing maturity is crucial in attaining lower level of waste and production nonconformities as well as the failure costs reduction and, on the other hand, the increase of revenues, better decision-making and more sensible investing. Comparing to prior studies the novelty of this paper is in introducing the maturity of accounting system pointing out that more advanced level of Quality Costing application leads to the wider scope of quality data that can be used as a compass in quality management. Empirical research is based on online survey addressed to quality managers. Findings indicate that comprehensive recording and reporting of adequately categorised quality costs can produce many benefits for the organisation.