RJP Consulting - Accounting Solutions

Accurate and relevant cost information is critical to any organization that hopes to maintain or improve, its competitive position. For years, organizations operated under the assumption that their cost information actually reflected the costs of their products and services when, in reality, it did nothing of the kind. While hiding their shortcomings behind a cloak of precision, over-generalized cost systems were actually misleading decision makers, causing them to make decisions inconsistent with their organizations' needs and goals.

Activity-based costing (ABC) is a valuable concept that can be used to correct the shortcoming of the over-generalized cost systems of the past. It is a means of creating a system that ultimately directs an organization�s costs to the products and services that required those costs to be incurred.

At many organizations, ABC has evolved beyond the point of simply developing more accurate and relevant product, process, service, and activity costs. These organizations use ABC as a means of improving operations by managing the drivers of the activities that cause costs to be incurred. They are using ABC to support major decisions on product lines market segments, and customer relationships, as well as to simulate the impact of process improvements. Organizations involved in Total Quality Management processes are using both the financial and nonfinancial intermission of ABC as a measurement system.

ABC can be used this way because it provides across-functional, integrated view of the firm, its activities, and its business processes.

The Theory of Constraints (TOC) allow companies to effectively maximize the ROI equation by creating holistic solutions that maximize a system's performance by identifying, exploiting and synchronizing around critical leverage points.

TOC is an overall philosophy developed by Dr. Eliyahu M. Goldratt, usually applied to running and improving an organization. TOC teachings consist of:

Problem Solving Tools - called the Thinking Processes (TP) - which logically and systematically answer three questions essential to any process of ongoing improvement:

   "What to change?"
   "To what to change?"
   "How to cause the change?"

Daily Management Tools - taken from the Thinking Processes (TP) - are used to significantly enhance vital management skills, such as:

   win-win conflict resolution
   effective communication
   team building skills
   delegation
   empowerment

Proven Solutions - created by applying the Thinking Processes (TP) in specific functional areas such as Sales and Marketing, Production and Materials, Project Management, Finance, Accounting, Engineering, and Purchasing. Many of these solutions are discussed in detail in the books: The Goal, The Race, It's Not Luck, and most recently, Critical Chain.