Your Cost System Warning Label. What Does It Say?
Mar 02, 2015
I was looking around LinkedIn this morning and I came across a really interesting graphic that read “if we were all forced to wear a warning label, what would yours say?” What a thought provoking question? I’m curious as to what some of yours would say? I of course pondered my own. I think it would say something like “Warning: Tells it like it is,” or maybe “Not afraid to speak her mind.” Something along those lines. I do not think I’m too forceful, but at the same time I typically I have no problem voicing my thoughts and being assertive.
Of course, I then wonder how I can this can apply to cost accounting. What would your cost system warning say? Warning:
- Garbage in-garbage out
- These numbers are wrong
- The boss is coming, pretend we have it under control
Of course, these are all in jest. However, some of you, even though you may be chuckling also feel the pain. If you are being honest with yourself you recognize that your system may not be effective and changes are required. You may also recognize that while you are in charge of the system, you may require guidance.
So many costing systems are not accurate and fail to provide the necessary information. The information you can get from a well-made costing system is crucial. As management, you can make swift decisions with confidence when you have good data. This is especially true when you are in a desperate situation of having to make critical decisions in a short time frame. The decisions required in these scenarios are hard enough, do yourself a favor and have good information to support the decisions.
We of course always want to think positively, but the reality is you have or may go through a time where you have to lay people off or even let them go. That is one of the most difficult decision you may ever have to make. Make those decisions with the right information and with confidence by having the right data and information.
Do what is needed today and get your costing system to say, warning:
- My cost system provides clarity into my future
- Has the ability to make quality business decisions
- Provides timely and relevant information
Take my warning label and be honest with yourself! Get the help you need and get your costing system where it needs to be!
Categories: Cost Accounting