Contemporary Topicsx

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6 Νοε 2013 (πριν από 3 χρόνια και 10 μήνες)

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ACTG 4310

Contemporary Cost/Managerial
Practices

Contemporary Topics in Cost and
Managerial Accounting


Lean Accounting


Sustainability Reporting


Intellectual Capital Management


Knowledge Management


Global Business Services


Customer Value Management

Lean Accounting

Lean Accounting


Lean Manufacturing


A management strategy that requires everyone in the
value stream to have one common vision for the
company of reducing waste, resulting in
improvements in quality and production/service time
as well as reduction in costs.


Continuous improvement is emphasized


Customers are the main focus


Pioneered by Toyota in the 1950s

Contemporary Lean Accounting


The objective is to eliminate waste, free up capacity,
speed up the process, eliminate errors and defects, and
make the process clear and understandable.


Fundamentally change the accounting control, and
measurement processes so they motivate lean change
and improvement, provide information that is suitable for
control and decision
-
making, provide an understanding
of customer value, correctly assess the financial impact
of lean improvement, and are themselves, simple, visual,
and low
-
waste.


Lean Accounting


Key tool in Lean Accounting


Value Stream Costing


Direct costing by value streams


Typically collected weekly


Little or no allocation of “overheads”.


Provides financial information that can be clearly
understood by everybody in the value stream which in
turn


Leads to good decisions


Motivates employees to improve across the entire value
stream


Assigns clear accountability for cost and profitability

Value Stream Costing


Weekly reporting
provides excellent
control and management of costs because
they can be reviewed by the value stream
manager while the information is still
current.


Modify chart
-
of
-
accounts
structure to value
stream groupings rather than by traditional
departments.

Watlow

Electric


Replaced month
-
end variance reports with
daily
operator generated reporting


Has been very satisfied with lean
accounting


Attributes 15% increase in sales and sales
margins to lean accounting

Corporate Sustainability
Reporting

Sustainability


The new buzz word for
social/environmental accounting.


Puts dollars to the social/environmental
accounting agenda.


Focuses on doing the right thing for
employees, consumers, society and the
government.


Incorporates profits into doing the right
thing.


Triple Bottom Line (TPL or 3BL)


Created by John
Elkington

in 1994


Triple Bottom Line accounting means
expanding the traditional reporting
framework to take into account ecological
and social performance in addition to
financial performance




People, planet, and profit.

People Bottom Line


Known as human capital.


It relates beneficial business practices
toward labor, the community and region.


Includes good labor practices, human
rights, and product responsibility.


It also posits that the company should give
part of its profit to the surrounding
community in donations.

Planet Bottom Line


Known as natural capital and includes
water, air, energy, waste produced, etc.


Evaluated by how well a company
includes environmental consideration into
its activities.


A company should try to minimize its
impact on nature among all its operations.

Profit Bottom Line


The organizational economic impact on the
environment.


Can include traditional financial measures.


Refers to an “honest” profit, frowning upon
excessive profits with excessive job losses.


It must be made in agreement with the other
two bottom lines.


3BL views people, plant and profits
together,
not separately,

as opportunities for the better.

Financial Examples


73% of the Top 100 U.S. Companies issued
stand
-
alone Sustainability Reports in 2008


Examples of companies:


Johnson & Johnson (began reporting in 1993


declared IMA leader in sustainability reporting)


FedEx


WalMart



Pepsico


Environmental Cost Calculators


Carbon Footprint Calculator


www.carbonfootprint.com


Nature Conservancy carbon footprint
-
www.nature.org


Terrapass

calculator for travel emissions
-
www.terrapass.com


EPA


individual emissions, household emissions


epa.gov/
climatechange
/emissions/ind_calculator.html



PG&E


Climate Change


www.pge.com/myhome/environment/calculator



Berkeley Institute of the Environment
-
coolclimate.berkeley.edu



Paul
Hawken
, environmental activist and founder of Smith
and
Hawken
, estimates that 1
-
2 million organizations
worldwide are actively doing something to implement
sustainability.



Management Control


Management accounting can play a role in
implementing corporate sustainability in
the following areas:


Budgeting


Capital investments


Life cycle costing


Responsibility accounting


Performance evaluation/reward systems


Balanced scorecard applications

Intellectual Capital
Management

Facts


We are a knowledge
-
based economy


In the 1980s, about 60% of assets were
tangible assets like property, plant and
equipment.


Currently, only 10%
-

50% of a company’s
assets are tangible.


Most of the value of a business comes from
their intellectual capital.

Definition


Intellectual capital (IC)


all resources that
determine the value and competitiveness
of an enterprise



Three elements of IC:

1.
Human capital

2.
Structural (organizational) capital

3.
Relational capital



Intellectual Capital


Human


what the workforce brings to an
organization


Creativity, flexibility, attitudes, expertise,
integrity, past experiences, motivation,
wellness, leadership, management, mentoring


Structural


what the organization
possesses after the employees go home


Organizational routines, procedures, manuals,
strategies, systems, databases, corporate
cultures

Intellectual Capital


Relational


associations that
organizations have


Customers, suppliers, governments


Company image, customer loyalty, customer
satisfaction

Knowledge Management (KM)

Definition


The process through which organizations
generate value from their intellectual and
knowledge
-
based assets


Knowledge


Can be described as the awareness of what
one knows through study, reasoning,
experience or association, or through various
types of learning.


Should not be confused with data or
information


Is a process and is always changing


Knowledge Management


KM is a procedure used to identify, create,
represent, and distribute the explicit and
tacit knowledge of individuals in the
organization.


Tools


information technology and
training for:


Determining “Best Practices”


Sharing of lessons learned


Continuous improvement of the organization


Global Business Services
(Shared Services)

Global Business Services (GBS)


Are essentially
shared business services
where


a service is controlled by one part of an organization


the funding and resourcing of the services is funded
by all the other departments


creating an internal service provider for the entire
organization.


Is used by companies with multiple geographic
locations


IMPORTANT TO NOTE


GBS is not OUTSOURCING because with
outsourcing a third party external vendor provides the
service whereas GBS are kept in the company.

Functional Aspects of GBS

1.
More controllership of functions

2.
Flexibility with operations

a)
All sectors and departments within an organization
(sales, marketing, finance, human resources, etc.) can
be included

3.
Reduces need for redundant accounting
operations

Customer Value Management
(CVM)

Customer Value Management
(CVM)


Managing each customer relationship with
the goal of achieving maximum lifetime
profit from the entire customer base.



Two basic goals:

1.
Deliver superior value to targeted market
segments.

2.
Receive an equitable return on the value
delivered.

Importance of CVM


Current Economy:


A company’s ability to attract and retain
customers has been a key component of
success. In the current economic downturn,
customers have become a
scarce

resource to
some companies.


It is cheaper to keep a customer than to get a
new one.
This has caused many
organizations to move towards becoming
more customer
-
oriented
and less
product/service
-
oriented.

Customer’s Lifetime Value
(LTV)


LTV = Purchase size X Frequency X







Duration



Goal is to increase each part of the
equation

Strategies


For profitable customers


Offer price incentives and discounts


Provide customized support


Offer customer rewards programs


For less profitable and non
-
profitable
customers:


Charge additional fees for services


Increase prices or reduce costs to the
customer


Eliminate relationships


Customer Retention


It is important to keep profitable customers


It is also important to keep customers that
are not as profitable but tend to be loyal
over time (LTV).


The goal is to maintain the most valuable
customers, NOT ALL OF YOUR
CUSTOMERS.


Loyal customers are more profitable
because they are less price sensitive than
others.

Conclusion


Lean Accounting


quicker response time that
adds value


Sustainability


do the right thing and let
everyone know about it!


Intellectual Capital Management


Find excellent
employees and keep them!


Knowledge Management


Determine best
company practices and share them throughout
the company



Conclusion


Global Business Services


consider
combining services throughout your
organization to save money and be
consistent


Customer Value Management


Maximize
the lifetime values of our customers.



ALL OF THESE TOOLS CAN HELP YOU
CHANGE AND IMPROVE THE
MANAGEMENT OF YOUR COMPANY
!!!!