The need to remain competitive is driving firms to increasingly seek competitive advantages by collaborating more intensely with their partner firms. One aspect of collaboration between firms is interorganizational cost management, where the focus is on specifically managing costs from both a focal firm and a partner firm perspective. This study integrates literature from the information systems, managerial accounting, and operations management fields to create a multi- disciplinary view of interorganizational cost management (IOCM) as an IT-enabled organizational capability. We develop a research model that focuses on both the antecedents (electronic integration, absorptive capacity, and internal cost management) and the consequences (benefits) of IOCM. Our model is tested from a sample of managerial accountants who work in firms that are a part of a supply chain. The results show that IOCM leads to specific firm benefits for the focal firm, and that electronic integration and a firm’s absorptive capacity for IOCM are both direct antecedents to the IOCM capability.