Over the course of time, if you have been with us for awhile, you will notice that we have run articles on different costing alternatives, standard cost, lean accounting, throughput accounting, etc. It is generally the policy of the Society of Cost Management not to take sides in the ‘great costing debate’. We believe that all alternatives have viable applications depending on the industry, business, product, and management approach.
We also believe however, that the old way of doing business is no longer appropriate. Simply valuing inventory to follow GAAP practices is not sufficient. The modern Cost Management professional needs to be bold in their approach and proselytize the faith (in this case, the faith being better Cost Management practices). Our real bread and butter is in robust analysis of viable alternatives which help to grow the business. Also in communicating good alternatives to management, not just throwing numbers over the wall. It is time for a new paradigm in cost management, a paradigm of change, and communcation. It is time for us to become a true business partner.
How many businesses are there out there that still use standard cost with one overhead cost pool? To make matters worse still, how many that are are not at following good practices with their standard cost. A few weeks ago there was a poll on our LinkedIn page regarding the respect that Cost Management was garnering. We probably get the respect we deserve and as long as produce same old, same old . . .
There are some big issues to deal with, Performance Improvement, Integrated Reporting, and Big Data. How can we expect to be Champions on these, if we haven’t even championed Cost Management?
So join us here for your regular dose of Cost Management, we have much more in store.