What is the difference between cost estimating and cost accounting?
Cost estimating is a precursor to cost accounting because it done at the beginning of the process. Lets define cost estimating as the estimation of the cost of a goods or services prior to the actual production of the goods or services. Cost estimating is used in both the production of goods and services to perform a specified action.
Cost accounting or costing is different then cost estimating because its an analysis of the costs to actually product the goods or services. Cost accounting is done after the production while the cost estimating is done prior to the costing of the goods and services.
I like to think of cost estimating as being an educated guess. Unless there are simulations which can be run to determine the exact cost estimate, the estimator is performing a best guess based on previous knowledge. Cost estimating is a prediction while cost accounting is actually what expenses where where incurred during the production process.
Cost estimating is a complex process and requires a person who understands the domain in which the cost estimating is taking place. Some of the items that are considered
Materials and how they are used in the product or services
Operational steps required to produce the product or services
Machine and Labor costs involved
Visually be able to understand all the areas of manufacturing from the requirements