| An Evaluation of Using Cost Rate Terms for Finding Cost Data on the Internet September 14, 2006 I. Introduction. This article reports on the results of an evaluation of using cost rate terms to quickly find relevant cost data on the Internet. Such an evaluation is in keeping with a goal of the Management Accounting Information Center (MAIC) of being a website that will assist management accountants, managers, business owners, and other decision makers with the use of the Internet to meet their informational needs. The author believes that what is described in this article will work to generate a relatively high percentage of links to websites that have actual costs (dollar amounts) for various activities and transactions carried out by businesses. What is described here, the author believes, is a relatively efficient and effective approach to finding this cost data. Such actual costs can be very useful for several purposes in business decision-making. The next section provides details on the use of cost rate terms in searching the Internet for actual costs, and the results. The final section provides some conclusions about the benefits of using cost rate terms to find cost data. II. Details On Using Cost Rate Terms to Find Cost Data On the Internet. While cost data was being sought for use in two previous articles, the approach that is described in this article of using cost rate terms evolved. (The two articles are “Quote Websites for Price Information” and “Price Comparison Internet Sites for Company Decision Making”. These articles can be accessed from the front page of the MAIC.) In general, while searching for cost-related information for these two articles, I was getting poorly relevant search results. A lot of searching on many different terms was required and many links, delivered by the search engine being used (Google), had to be clicked to examine what was at the websites being linked to. Often the data at the site was not relevant to what was wanted. For most searches completed, in the first 50 links that were delivered by the search engine, there was a relatively low number of links that went to websites with useful information. While seeking out this cost-related information, one of the search terms that came to me to use was “per square foot”. I believe I was looking for construction cost information and it occurred to me that “per square foot” was a “rate” used in expressing construction costs. I noticed when using “per square foot” in searches I was getting dollar amounts appearing in the results that was on Google’s search result page (as well as “per square foot” also appearing in the result). Actual costs, or dollar amounts, was what I was after. Because dollar amounts were appearing on the search page, the websites linked to, which had dollar amounts in the search result description, would likely have actual cost data for activities and transactions of interest in business. Being able to see in the search result description on the search page, an indication that actual dollar amounts would be available at the website, I believe, increases the search efficiency and effectiveness for what I was trying to find. In addition to knowing from the search page something of the dollar amounts that might be found at the website linked to, by using cost rate terms the percentage of “hits” with good cost data seemed to be higher. The data in the table below seems to show this. A broader interpretation of what came to me is that I discovered that actual cost data (actual dollars) are usually presented as a rate. By rate, I mean dollars per some measurement value. Therefore, by searching on the “measurement values” (or cost rate terms), dollar amounts, which are usually associated with the cost rate terms searched, will be found. Examples of cost rate terms (measurement values) are: Per square foot Per month Per payment Per invoice Per shipment Per job Per program Per bill Per purchase order Per sales order Per PO Per employee Per year Per hour These cost rate terms (measurement values) were searched using Google, and the number of “hits” or links within the first 50 results, served up by the search, containing dollar amounts were counted. Very often, but not always, the cost rate terms can be teamed up with a modifier that further defines the cost data that is wanted. Examples of modifiers that were used in some of the searches are in the table below. Here are the results: |
| cost rate terms searched modifier terms used (if any) number of "hits" in the first 50, with dollar amounts % relevancy of the hits (# of hits/50) per square foot construction costs office 23 46% per square foot warehouse storage 22 44% per square foot lease 31 62% per square foot rent 32 64% per month 24 48% pay payment 37 74% per invoice 12 24% per shipment 33 66% per job 9 18% per job printing 10 20% per program 13 26% per bill 27 54% per purchase order 10 20% per sales order 3 6% per PO 9 18% per employee 16 32% per year accountant salary 33 66% per year plant manager salary 21 42% per hour attorney 22 44% per hour accountant 20 40% per hour engineer 27 54% |
| page 1 and final page |
| No attempt was made to evaluate the usefulness of the cost data that was at the websites that the search result links lead to. Such an evaluation is beyond the scope of what is being attempted here. The attempt here is only to find a way to use a search engine to give a higher percentage of possible relevant results, and to make the search process more efficient. The relevancy percentages shown in the table above, ranging from 6% to 74%, with an average of 41%, I believe, are very good relevancy percentages, likely to be better than usually obtained when searching for such a specific search target as the actual costs (dollar amounts) of business activities and transactions. III. Conclusions. Having a broad-based, reliable, and quickly accessed source (e.g., the Internet) that provides the actual dollar amounts currently being needed for services and products and other company-related activities, should be useful to a company for many reasons. Many important decisions made by a company depend on the costs needed for the various variables being decided upon. A company should benefit with increased awareness of the costs others are currently paying for activities and transactions. Other sources of cost data such as marketing and benchmarking studies, and networking can be costly and time consuming. The Internet is a relatively new, and also evolving, alternative source for various “types” of information, including cost data. Companies who learn the what’s and when’s and how’s of using the Internet efficiently and effectively should have greater benefits than those companies that do not learn. The Internet likely would be a lot less costly source, and where the Internet will do, a company should take advantage of using the Internet. Using cost data terms to efficiently and effectively obtain cost data may not work in many cases, and may not provide the needed data. There are no guarantees. However, this is an area where “continuous learning” and research is necessary and does offer the possibility for better company decision-making. click here to return to the Management Accounting Information Center's home page click here to send comments on this article or to suggest a topic for another article |