What's New From PACE
Profitability Analytics Center of Excellence
A non-profit community of professionals helping companies use analytical models to enhance organizational value.
Welcome to the newsletter “PACE News”.?Click “Subscribe” to receive a notification and an email when we publish new articles on this channel monthly.?
Become a member of PACE at no charge to get access to many articles, podcasts, webcasts, case studies, and eBooks. Visit?www.Profitability-Analytics.org
September and October have been exciting months. We had our first Profits+ Virtual Conference, with many excellent, industry-leading speakers, and the replays are now available for all PACE Members. Click here to watch the replays https://tinyurl.com/nhjb3ea5 .
In addition, we have recorded 6 new podcasts, which will be published starting this week, and we have had several new articles published to our forum.
Summaries of four of them are below and there are more to come.
Enjoy!
Embracing Agility by Paulo Jorge Ribeiro
Embracing agility in financial management and FP&A.
The goal of PACE is to facilitate faster, improved, more confident decision making that moves a company forward.
There is a great benefit to trying things, even if the result might fail, because it creates a culture of innovation.....and well informed, motivated people, that have the freedom to innovate safely, will succeed much more often than they fail.
PACE doesn't mention agile as much as we should, so thanks Paulo Jorge Ribeiro (a PACE member) for this article in our Forum!
PACE's Profitability Analytics (PA) Framework very much supports agile.
As we'll describe in the next 2 eBooks that we'll be publishing soon, the framework calls for the development of causal models of the operations of an organization.
These models can be used in a variety of ways.
? They can be used for quickly quoting a price on a special order, rather than having to do a special costing study.
? They can be used to quickly analyze the benefits of proposed operational improvements.
? They can be used to manage performance, providing detailed information for performance variances. So lean is also very much a part of the PA Framework! and much more.
In Paulo's article he mentions three processes where agile can be applied (there are many more).
? Agile budgeting with rolling forecasts
? Agile cost management
? Agile performance management
Link to the full article https://tinyurl.com/5d5ncda4
Does your organization have a CFO or a CFno? by Gary Cokins
In this PACE forum article, Gary Cokins explains his frustration with some (read many) CFOs and their accountants not being progressive and too slow to adopt modern management accounting methods.?
"I often humorously say that many CFOs and accountants are still in the 1970s. But perhaps that is not so funny." says Gary.
The frustration is that many focus time mainly on the VALUATION of the company for external reporting purposes and not enough time on VALUE CREATING for internal purposes for today and for the future.
领英推荐
In the article, he talks about the challenges of change, how activity-based costing - done the right way - can help, and also how to have a conversation with the CFO to convert them from a CFno to a YES CFO.
Link to the full article https://tinyurl.com/dz6mw6se
How to Prepare for the Future of Management Accounting and Control by Paulo Jorge Ribeiro
Thank you to Paulo Jorge Ribeiro for posting this article in our PACE forum.
In it he discusses how the field of management accounting and control is undergoing significant changes and disruptions due to factors such as technology, globalization, regulation, and social expectations.
Paulo suggests a possible priorities roadmap for the next 3 to 5 years for companies and professionals in management accounting and control and focuses on four main areas:
?? Technology
?? Reporting
?? Ethics and
?? Partnering
Not only does he provide WHAT to focus on, but also WHY and the possible RESULT of doing so.
Link to the full article https://tinyurl.com/42f4ppe7
It’s (past) Time to KILL a Word – “Allocation” by Larry White
In Larry White 's latest article, he challenges the use of the word allocation (and the activity) and concludes that it should not be part of the terminology used for management accounting.
"The essence of internal decision support information is CAUSALITY, the reflection of causal relationships; the ability to go from cause to effect or effect to cause.
That’s the difference between cost accounting, which should be defined as the costing done to comply with regulatory or financial reporting, and managerial costing, defined as the costing done purely for internal decision support…where causality rules.
My suggestion for terminology is "causal assignments" of costs.
In some cases, there may be weak causal assignments or noncausal assignments, but these should be clearly identified.
So for financial internal decision support models and information, DEATH TO (ever saying or using) ALLOCATION!!!Let causality rule!"
Link to the full article https://tinyurl.com/3e8w62yk
If you want to see more PACE content, please check out our?LinkedIn PACE Channel ?,?website ?,?X account (formerly known as Twitter) ?, and Podcasts on?Spotify ,?Google ?,?Apple Podcasts ?and?YouTube .?To learn even more, read our eBooks on:
The Profitability Analytics Center of Excellence (PACE) is a?non-profit community of volunteer professionals?dedicated to helping organizations make better, more informed business decisions through the use of data analytics employing integrated, causal models.?Focusing exclusively on how to enable better managerial decision-making within organizations through the use of such models, PACE is the go-to source for people looking for independent and impartial (vendor and methodology neutral) information in this area. Find many more articles at?www.profitability-analytics.org ?. Become a member today (no cost to join).
Associate Professor Of Accounting at Eastern Kentucky University
1 年exciting things happening at PACE
Founder and CEO: Analytics-Based Performance Management LLC; Expert in ABC, EPM/CPM, Profit Analysis, Budget, Analytics
1 年This is a good resource of past PACE articles. A little bragging here. I authored one of the articles in it. Its title is "Do You Work for a CFO or a CFO..No?" It discusses how behavioral resistance to change is slowing the adoption rate described in the PACE PAF and in EPM/CPM methods.
Educator, Author, Consultant
1 年With a summary of articles, and the report on the PACE conference, this newsletter is full of good stuff!
Really good articles here. I like that finance and accounting are being more receptive of Business Partnering and Ethics in addition to Technology - although technology will be prominent shortly!
A lot of good information and links to even more. Great newsletter!