Prevent The Sinking Of Your Costing Ship

Apr 21, 2015

A colleague of mine, Doug Hicks, recently wrote an article on LinkedIn titled, The Navigator and the Management Accountant. It is an interesting article and one in which I certainly agree. Not everything Doug says do I agree, however, in this case, I believe he is spot on. This is a subject I have written about many times over, and I will continue writing about it until it starts to set in.

Of course, having an error in cost accounting typically does not mean someone will lose their life. However, it may mean someone will lose their life savings and their livelihood. It can mean years of heartache and stress associated with financial difficulties, which can lead to businesses falling apart, and health issues at the very least.

The navigator on the ship in Doug’s story was too concerned about looking foolish or having his boss yell at him to alert “the captain” to the  issues. The navigator SHOULD have known how to navigate a ship, especially having the title navigator. Instead of admitting he was unsure and may need additional training or help from experts, he remained silent and as a result people lost their lives. He was smart enough to know he did not understand and stayed close to a lifeboat, but it did not help anyone else.

Do not go down with the ship! Instead, admit you need help when you do not understand. Some bosses may get frustrated and expect you should as you are a controller, cost accountant, or CFO. However, the truth is many people in these positions do not know. Admitting your lack of understanding can keep your company alive and allow for a promising future.

Sign up for continuing education courses, hire outside consultants, do something! Do not just wait so you can then jump to another ship and bring it down. It is common for controllers to change jobs every few years, ask yourself why. Sure sometimes it is for more money as they are capped out at their current employer, or for other personal reasons. But, isn’t it many times because they were exposed for their lack of knowledge and they need to move where they can hide out for a big again?

Stop sabotaging your company because you are too afraid to admit you need help. Sign-up for our cost accounting course offered in conjunction with the Indiana Society of CPA’s. This full day course will explore the five essential components of a successful cost model which applies to any organization. When you are able to generate accurate costing data, there are a number of possible short-term and long-term decisions you can make effectively. We will cover these decisions what factors to consider when making such.

Categories: Cost Accounting