Accounting

Portfolio 5313-2nd: Internal Reporting, Improvement Initiatives, and Building Resilient Organizations

  • Internal Reporting, Improvement Initiatives, and Building Resilient Organizations explains how accounting departments can function in a business environment that is demanding more real-time information and less historical accounting information.

Description

The first edition of Bloomberg Tax & Accounting Portfolio 5313, Internal Reporting and Improvement Initiatives, discussed popular corporate improvement initiatives and the role of internal accounting functions in implementing and maintaining these initiatives. In essence, this portfolio explains how accounting departments can function in a business environment that is demanding more real-time information and less historical accounting information. At the same time, accounting and finance people are required to keep up with changing requirements for external stakeholders, including official pronouncements of the Financial Accounting Standards Board (FASB) and the Security and Exchange Commissions of the U.S.A.(the SEC) and equivalent groups in foreign countries in which their organizations have operations.

The Portfolio begins by explaining the traditional role of internal accounting departments and how much of the information these departments provide does not contribute to the efficient operations of most businesses. Essentially, many accounting departments use traditional cost allocation methods required by U.S. generally accepted accounting principles (US GAAP), but these methods typically do not produce information that is helpful in making business decisions regarding operations. Moreover, much of the information accounting departments provide concerning productivity, such as certain variance reports based on historical information, typically do not provide the feedback necessary to help managers and employees assess their performance in a meaningful and timely manner.

This Revised Portfolio sets forth a practical vision for how accounting departments can transform themselves into corporate team members who contribute real-time information to managers and workers to help those individuals assess their performance and timely identify and correct production problems. It discusses the cultural changes that must occur, and the expanded roles accountants must take to effectuate this transformation. In addition, five new chapters will address broader initiatives that concern organizational resilience and the ability to remain competitive.

This Portfolio explains many of the popular improvement initiatives that organizations have adopted, in one form or another. These initiatives originally included six sigma, just in time, lean operations, Demand Flow®, and Theory of Constraints, and were designed to improve internal processes and production quality. One common theme in these initiatives was the concept of “flow” and a “pull” system, in which work is produced in response to customer demand, as opposed to a “push” system, in which work is produced in anticipation of customer demand. The revised Portfolio updates the basic concepts presented in the first edition and the benefits of each of these initiatives as well as their evolution.

For example, in the first edition only two improvement initiatives (Demand Flow and Theory of Constraints) had Flow as a top priority – now nearly all stress the benefits of flow. The new edition will also provide updated guidance on implementing an effective outsourcing strategy.

Following the explanation of improvement initiatives, this Portfolio explains the often-neglected new metrics that accounting departments should develop to support these initiatives. It also explains in detail how to reconcile suggested internal reporting results with external U.S. GAAP, confirming that only one accounting system need exist to provide information to internal managers and GAAP-approved reports to external users.

While improvement initiatives remain important, they are insufficient to ensure continuing success in a rapidly changing environment involving extreme technological developments in more globally connected markets and supply chains. Therefore, this new edition includes entirely new sections on Enterprise Risk Management, Big Data and emerging use of Blockchain, Artificial Intelligence, and Project Management. Because these new technologies will result in new work environments, a section on changes impacting Human Resources are included in this new edition. We believe these new sections will assist organizations to develop the resiliency required of successful organizations in uncertain future decades.

This Portfolio may be cited as Bloomberg Tax & Accounting Portfolio 5313, Internal Reporting, Improvement Initiatives, and Building Resilient Organizations.

Table of Contents:

I. Introduction
II. The Accountant’s Role as it Exists Today
III. The Future Role of Management Accounting
IV. New Operating Environments
V. Six Sigma and Other Quality Programs
VI. Just in Time (JIT)
VII. Lean Operations
VIII. Demand Flow
IX. Theory of Constraints
X. Outsourcing: The Outs and Ins
XI. Transforming Operations Accounting
XII. Information for Decisions
XIII. Performance Measurement and Evaluation
XIV. Broader Initiatives That Help Achieve Organizational Resilience
XV. Enterprise Risk Management
XVI. Big Data and Related Components
XVII. Artificial Intelligence and Related Topics
XVIII. Executive Summary of Project Management
XIX. Human Resources: Transitioning to a New Environment
XX. Closing Comments

CharleneBudd
Charlene Spoede Budd
Partner
Budd Management Systems
budd-charles
Charles Budd
Principal
Budd Management Systems
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