Why should-costing will make the difference in 2026 – knowing your costs means staying in control

In an increasingly complex and uncertain economic world, should-costing is becoming a key strategy for companies that want to secure their margins and optimize their supply chains. The days of simple calculations are over—now, what counts is precise transparency at all levels of the value chain.

What is should-costing - and why now?

Should-costing, or "target costing", describes a method for determining the ideal costs of a product or service based on material prices, production processes, wages and other influencing factors. In 2025, this tool will be more important than ever: rising raw material prices, volatile procurement markets and growing competitive pressure make data-based cost transparency indispensable

Advantages of should costing in 2026

1. Increase your bargaining power: If you know the actual target costs, you can negotiate with suppliers on equal terms.

2. Identify potential costs: Inefficiencies and price markups can be specifically identified and eliminated.

3. Ensuring competitiveness: Companies that understand their cost structure can act more quickly and efficiently in the market.

4. increase planning security: reliable cost data facilitate forecasts and investment decisions

Technology and tools: Digitalization meets controlling

2025 also brings technological advances into play. Modern should-costing tools use artificial intelligence to analyze large amounts of data, simulate scenarios and automatically uncover cost drivers. This not only saves time, but also ensures more informed decisions in purchasing, development and production.

Best practice: How to get started

- Create a data basis: Should-costing does not work without valid data.

- Form interdisciplinary teams: Purchasing, technology and controlling must work together.

- Start pilot projects: Small, manageable projects help to establish the method.

- Promote transparency: Openness towards partners strengthens credibility and negotiating power.

Conclusion:

Should-costing is much more than a cost calculator—it is a strategic management tool that helps companies actively shape their future. Understanding your cost structures today secures your market advantage tomorrow. After all, knowing your costs means staying in control.