Dynamics of Profit-Focused Accounting: Attaining Sustained Value and Bottom-Line Improvement

REPORTING CONCEPTS AND TOOLS

After providing guidance on what to measure, what the measurements mean, and how to determine them, it is important to consider the variety of ways they can be used. A good place to start is: Who needs information, what do they need, and why do they need it? Our discussion will cover a wide area of issues and ideas. The new reporting model will be applied to a range of scenarios that also fits more traditional situations.

Speed combined with reliability is a critical issue in transmitting information in the current economic environment, and some level of reporting is needed on a daily basis. By issuing what I call a flash report daily, an organization can stay on top of critical information. Each organization will differ, but a starting point might be sales, orders, cash, and some indication of production compared to the planned schedule on a daily basis. If management stays on top of the critical elements on a daily basis, then the potential for surprises is reduced. For weekly reporting, I suggest expanding the amount of data for managers to look at and show more metrics as fits the organization. One of the problems with data and reporting is that there is a tendency to have more information disseminated than can be used and acted on logically. Every effort should be made to keep the number of measures down to the few that really matter. Shop-floor and operations people have their own key...

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