What are the costs of quality?

The quality movement has used the term Cost of Quality (COQ) for decades. However, in practice, few companies know how to employ methods to implement and measure quality (or non-quality) costs in their business.

Are the efforts made to ensure quality worth it? Can you answer this question with absolute certainty?

At an operational level, quality management techniques should identify waste, solve problems and optimize processes. The focus is always on prevention, but if a problem should manifest itself, reactive resolution is also part of the improvement process.

However, it is at the strategic level that the role of quality is lost. Little is said about quality in relation to the strategic and even financial objectives of organizations. As a result, organizations are unable to quantify the benefits of quality in financial terms. In short, when it comes to quality, there is a gap between operational and strategic levels.

ISO 9001:2026 strengthens the connection between quality and strategy

Published in September 2026, the new version of ISO 9001 reinforces the relationship between the Quality Management System (QMS) and the organization’s strategic objectives. Key updates include greater emphasis on leadership’s role and quality culture, more explicit alignment of the quality policy with strategic direction, and a clearer distinction between risk management and the identification of opportunities.

These changes highlight the importance of assessing quality not only in terms of compliance with procedures but also in terms of its contribution to business results. In this context, analyzing the cost of quality helps organizations identify how much they invest in prevention and appraisal and how much they lose due to internal and external failures.

ISO 9001:2026 does not prescribe a specific methodology for calculating these costs. However, the Cost of Quality (COQ) model can be used as a management tool to monitor QMS performance, identify improvement opportunities, and assess whether investments in prevention are helping reduce rework, defects, and complaints.

By linking this data to business objectives, organizations can better prioritize actions and support financial decisions with evidence.

The costs of quality

Generally speaking, the costs of a process or service can be divided into two categories:

1. Error-free costs

Costs that are not related to planning, controlling, correcting, and improving quality. These are direct costs, considering that everything runs well in the process.

2. Cost of quality

These are the costs associated with quality management, including resources allocated to failure prevention and conformity appraisal, as well as expenses resulting from internal and external failures. This classification makes it possible to assess both the investment required to prevent problems and the financial impact of failures on processes, products, and services.

Quality costs can be sub-divided into another two groups:

1. Compliance costs

These are costs related to the preparation and assessment of compliance with requirements.

2. Non-compliance costs

Costs related to internal or external failures (internal failures are detected before reaching the end customer, and external ones are detected by customers).

A simplified definition of COQ is that costs of quality are the costs for avoiding, identifying and resolving detected defects and errors.

Identifying and classifying costs within these categories (prevention, evaluation, internal failure and external failure) and comparing them with investments made is an interesting method for demonstrating results. Conceptually, the four categories should always have their amounts reduced, but the cost of prevention needs to be increased so that the costs of non-compliance are reduced in the future. This makes the COQ method more than simply a costing scheme; it becomes a tool to base financial investments on.

Vous cherchez plus d’efficacité et de conformité dans vos opérations ? Nos spécialistes peuvent vous aider à identifier les meilleures stratégies pour votre entreprise avec les solutions de SoftExpert. Contactez-nous dès aujourd’hui !!