Which costing is delayed until goods are finished. Costs are then ‘flushed’ back at the end of the production process and assigned to the goods. This approach helps in eliminating all work-in-process accounts and manual assignments of costs to products during the various production stages.
Backflush accounting is entirely automated, with a computer handling all transactions. Backflush costing may not always conform to generally accepted accounting principles (GAAP) and also lacks consideration of sequential audit trail.
Backflushing is not suitable for long production processes, neither for the production of customized products.
Through this, the operator will then issue all the materials in a single transaction exactly the way they want it in their production line.
Blind backflush is also an option wherein the operator is not aware of the reports that the production reporting software creates.