PACE Moments

In this podcast, Doug Hicks, a director at PACE, discusses a significant gap in accounting education: the lack of historical context for the ideas being taught. Hicks argues that without understanding the history and reasoning behind accounting practices, students may end up just memorizing rules without grasping their true purpose.

Hicks concludes that management accounting, unlike financial accounting, should focus on understanding economic realities and adapting to specific situations rather than just following set rules. He calls for a new approach to teaching management accounting to better prepare accountants for modern economic challenges. He invites listeners to share their thoughts on this topic.

For more information on this topic, visit www.profitability-analytics.org

Larry White discusses the importance of operational versus financial metrics. Initially, it may seem that both are equally important, but he explores this further. In manufacturing, traditional methods of inventory valuation and product costing have led to distorted information, which operations personnel have often disregarded. Despite this, manufacturing efficiency, quality, and performance have dramatically improved due to a focus on operational metrics rather than financial data. These operational improvements have led to better financial outcomes, not the other way around. From Larry's experience, only a small percentage of manufacturing professionals find accounting and finance information useful. To address this, the PACE model ensures that operational models form the basis for financial modeling, emphasizing causality and a broader view of costs, including customer and sales-related expenses. Effective decision-making should consider various costing dimensions and focus on long-term success. So, which metrics do you think are more important: operational or financial? To find out more about this topic, visit www.profitability-analytics.org

When you are already manufacturing 5 million pounds of candy, what does it REALLY cost to produce the next pound, 1,000 pounds, or even one million pounds?

In this edition of our PACE Leaders in Business podcast, we chatted with Jay David of Do Business Better about this very topic. Jay has had a very interesting career path that gives him a unique perspective on business. In this 20 minute podcast, we covered:

💥 His career journey so far

💥How his background gave him a different perspective on business

💥How he transitioned into Operations

💥What he saw from the Operations position that led him to change his thoughts on Cost Accounting

💥Jay's definition of product cost (a little different!)

💥Why product cost a bad thing to use as a basis for performance measurement

and more.

In this podcast, we interviewed Dawn Ringrose, Principal at Organizational Excellence Specialists. Dawn filled us in on some of the basics of Organizational Excellence.

Since 2015, Organizational Excellence Specialists has spearheaded an extensive global research initiative, delving into the state of organizational excellence across various sectors, sizes, and regions. In this podcast we covered the following:

💠What is an excellence model?

💠Who developed the first excellence models?

💠Who uses excellence models?

💠Are excellence models updated?

💠What are the latest developments in excellence models?

💠How do we know excellence models work?

💠What is a balanced system of measurement?

💠What is the awareness about excellence models across the working population?

💠Why is there low awareness about excellence models?

💠How does an excellence model compare to other improvement approaches?

What does that term actually mean??
Terms that are not well understood can lead to ill-considered actions.
In Larry White's podcast on "Problem Terminology in Accounting and Business", he rightly points out that customers or users who are often confused or bewildered about what they may need, may retreat back to the world of regulatory reporting because it feels more concrete.
But regulatory reporting is not helpful for them to make better business decisions.
Here are some of the terms for which he provides definitions.
💠 Financial Internal Decision Support Information
💠 Management Accounting
💠 Cost Accounting
💠 Managerial Costing
💠 Financial Accounting
💠 Profitability Analytics

Are you using the laws of man or the laws of nature in Finance and Accounting?

In this podcast, Doug Hicks, CPA, tells us how causality-based revenue, operating, and investment models must be populated with data that reflect the laws of nature, not the laws of man,

In this NEW podcast, Doug Hicks, CPA uses an excerpt from his book “Profitable Expectations: An Accountant Rising to the Challenge” to demonstrate an important point about using weights in modeling to better understand costs and get insights on your company. He does this through an excerpt from his book describing a discussion between an accountant and her mentor on using weights in modeling in a pet boarding company to better understand looking after cats and dogs, and how this impacts the cost to the company.

In this new podcast, Doug Hicks talks about his experience with

Those viewing their organization as a living entity act as if they were given stewardship of the organization during a particular period of its life. We’ll call these individuals stewards. Their objective is to pick up where the previous steward left off and provide the organization with the guidance and nurturing necessary to continue its development until the time comes to transfer their stewardship of the organization to another individual.

Those viewing their organization as a game (we will call these individuals game players), see their organization as a contest in which they must run up the highest score from the time they begin the game until they are either dismissed or find another game to play.

To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.

Do you understand the entire spectrum of economic radiation or only a small part of it?

In this new podcast, Doug Hicks compared advances in how we see things with only our naked eyes and then interpret the universe, and how we are now able to see much more with tools to enhance our vision.

Visible light is electromagnetic radiation that we, as humans, can detect with our naked eyes. Aided by tools, humans can now “see” and measure things that are invisible to the naked eye; from low frequency, low energy radio waves to high frequency, high energy gamma rays.

Financial accounting is the decision maker’s visible light. Through the eye of financial accounting, a decision maker can detect and measure only the economic radiation that happens to fall within financial accounting’s “visible range.” Financial accounting does not detect and measure all of the economic radiation lurking in the universe, only the radiation within its limited range.

Predictive, causality-based operating and economic cost models, like those promoted in the Profitability Analytics Framework, provide visibility along a much wider range of the economic radiation that permeates the universe.