How To Understand Cost Recovery

What is cost recovery? Cost recovery is primarily bringing back all paid expenses for a given service, product or infrastructure that is being used. If this is the case, almost all companies, agencies, corporations’ etc. have been inclined to this since many of its projects and programs are profit oriented businesses, or we should say public used services. For many years now, matters regarding cost recovery have been part of a great debate. So many factors considering scope, definition, target consumers etc. are the most common issues. Up until today, universal system flow for cost recovery varies from the kind of service it provides in different parts of the world.

Here are some basic tips on how you can understand cost recovery:

  1. Do some research. In order for you to understand the concept of cost recovery, you need to do some basic research. You can browse the internet to know more about cost recovery. Its definition, methods, solutions, progress, and even its importance. You can also visit your town’s library for more in depth understanding of the concept. And since cost recovery may vary from the services provided, you can even research further to the particular service you are inquiring into. For instance, your district water sanitation center. Since water is one of our basic needs, we are going to patronize that service, particularly if it’s under the scope of responsibility of the government for its people. You can either personally inquire or ask officials regarding that matter.
  2. Know the basics. Even though we do not have a universal platform or policies for cost recovery, it is better that we know its basic principle. Given that cost recovery has something to do in bringing back the cost paid from all the expenses for a given project, it is expected that we get the quality of service we need since we are paying for the services we purchase. This may include the cost segregation, gas recovery, state recovery, project recovery, network recovery, deductions, etc.  Sustainability of the service is one of the concerns of a consumer in dealing with cost recovery. Which cost to pay and how the costs are recovered, are two of the major concerns of the cost recovery concept.
  3. Inquire with the right person. Inquiring personally with the right person may give you a clearer understanding for the topic. They may be a member of the elderly, pioneering resident, government official, and officer in charge of a corporation, an expert and so many others.

Even though cost recovery controversies arise, its importance may not be put aside. Cost recovery may push the founders to provide long term sustainability for certain services. Tractable cost recovery may be a sign that the company knows how to handle its finances. With that, good decision making for the company is possible. Knowing your capabilities as a group is important, because you will always know your standing as a company. Long-term sustainability of the project may be possible if cost recovery is rightfully implemented.


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