Why Deep Cost Accounting Feels Unfamiliar in Technology Organizations
Deep cost accounting often feels unfamiliar in technology organizations because most teams haven’t worked with methods like Activity Based Costing or Job Order Costing. Corporate finance functions are built for reporting, not cost tracing, and technologists rarely encounter managerial accounting in their academic training. This post explores why these methods feel foreign in tech today and how historical shifts have made the skill set less common.
A Practitioner’s Introduction to Job Order Costing (JOC)
If Activity‑Based Costing explains why cost happens, Job Order Costing shows us exactly how it accumulates to the work we do every day. By following cost from resources to activities and into individual jobs, we start to see how requests, deployments, and even model inferences carry different costs, and why that matters for real-world decision making in cloud, platforms, and AI.
The Lineage of Accounting Concepts Leading Up to AI Costing
Even though AI token costing feels new, parts of it resemble patterns we’ve worked with for years in Activity Based Costing and Job Order Costing. When we view tokens as units of work, the lineage becomes easier to see. This post offers that perspective as one way to ground the discussion and support the shared learning happening across the field.
A Practitioner’s Introduction to Activity‑Based Costing (ABC)
Activity Based Costing is not a new method to learn. It is the mechanism behind the frameworks we already use. When we understand how resources flow into activities and how those activities support services, the logic behind ITFM, TBM, and FinOps becomes much clearer.
Technology Cost Management Isn’t New
Technology cost management isn’t a new discipline. it’s the long‑standing practice of unit costing, allocation, and cost to value modeling applied to a new domain. Retail, manufacturing, logistics, and utilities have used these methods for decades. The difference now is that technology has become complex enough to need the same accuracy and precision.