Material flow cost accounting does it improve performance?-a literature review

Sustainability is moving from margin to mainstream in the corporate world across the globe. This requires to put in place mechanisms that make the sustainability an integral part of decision making in the business organization. In this context, Material flow cost accounting (MFCA), an Environmental Management Accounting system is emerging as one of the promising system. International Organization for Standardization (ISO) has also issued ISO 14051 standard recently. This paper makes an attempt to give summary of early finding of case studies published highlighting the improvement in economic and environmental performance to stress the potential it offers and the need for its adoption by proactive Indian manufacturing firms industries that are in pursuit of sustainable development of their business. The early findings suggest that the MFCA offer great potential for improvement in economic and environmental performance and therefore, it is recommended that proactive manufacturing firms facing the global competition shall adopt it to achieve the sustainable development of the businesses.