Back to Search

Cost Accounting, R.I.P.: Cost Accounting Is Opinion, Cash Flow Is Fact Webinar

CPE

When
Jan. 15
11:30 a.m. - 3:00 p.m.

CPE Credits
4-A&A

Details

 Pricing

PICPA Member: $129 | Nonmember: $179


 More Information

Course No.
4193560B
Level
Overview
Prerequisites
None.

Description

  • Identify why modeling cash flow and capacity is superior to cost accounting.
  • Recognize the Adaptive Capacity Model.
  • Determine the difference between metrics and measurements.
  • Recognize Segall’s Law: A person with one watch knows what time it is; a person with two watches is never quite sure.

Highlights

Entities focus on cost accounting data rather than the factors that influence the data. Vast sums are spent to allocate costs that have nothing to do with cash. Instead, start with value, determine price, then justify costs that can incur profits.

Since you can calculate different costs using the same data it’s obvious that costs do not represent cash. Cost accounting confuses metrics with measurements. There are three primary reasons cost accounting is a bad practice: 1) You have to create and force math and relationships that do not exist; 2) By doing this, you lose touch with your operations; and 3) You create meaningless numbers that people consider as gospel, when in reality they are nothing but opinions.

The lesson is that a company needs to start with value, then determine price, which finally justifies the costs that can be profitably incurred to produce a good or service desired by customers. It seems so obvious to constrain your company with a final price before you begin to incur any costs, yet this practice is not widely followed, despite its proven successes. Costs are, no doubt, important to consider, but the crucial distinction is when they are considered, and what measures are to be used.



Speaker(s)


You May Also Like

Digital Currency Revolutions: How Bitcoin and Cryptocurrencies are Changing Commerce Webinar
Nov. 20 | Webinar
Identify what a blockchain currency is and what it isn't.Recognize how the IRS taxes Bitcoin.Determine the current accounting and auditingbest practices for digital currenciesIdentify what a digital wallet is, how ...
Pricing on Purpose: The Eight Steps to Implementing Value Pricing Webinar
Sept. 23 | Webinar
Identify how to have the value conversation with clients.Determine how to price the customer, not the services.Determine how to develop pricing and presenting options.Identify fixed-price agreements, pricing objections, project management, ...
The Top Ten Business Myths Webinar
Sept. 24 | Webinar
Identify why so much of the conventional business wisdom is more conventional than actual wisdom.Determine how to overcome these myths and focus on what truly matters in your organization.Recognize the ...