Material flow cost accounting (MFCA) is one of the environmental management methods of environmental management accounting. This is an effective method to help administrators manage costs well, simultaneously satisfying the two goals of "reducing environmental impact" and "improving business efficiency".

Benefits that this model brings:
- Improve the connection between the accounting department, environmental management department and production department. At the same time, improving the quality of accounting information systems thanks to the development of material flow-oriented data structures. The accounting department thus also has more responsibility in providing accounting information.
- Promote increased transparency of materials usage activities through the development of a materials flow model, which tracks and identifies material flows within an organization in both physical and monetary measures
To apply the MFCA method in Vietnamese enterprises in the current context, it is necessary to focus on the following issues:
- Widely disseminated to the business community, mastering basic application issues
- Support accounting staff to participate in courses related to MFCA to improve awareness and understanding of this method, which is also a premise for selecting personnel to join the MFCA implementation team in enterprises.
- Enterprises need to proactively classify environmental costs appropriately and separately track these costs on accounting books and accounting reports, this will be the basis for collecting and distributing costs in MFCA.
Article by MSc. Phan Thi Thu Hien published in the Finance Magazine Term 2 - June 2020.