Lies, Damned Lies, and Cost Accounting: How Capacity Management Enables Improved Cost and Cash Flow Management
Business leaders rely on accounting data such as profit and calculated costs as a guide to whether they are making money. Should they?
Accounting was designed to report financial performance not model cash flow. Accruals can disconnect cash flow from the timing and extent to which it occurs. Statements of cash flow do not provide insight into what was bought and how efficiently it was used. Costs and profits are not absolute, they change based on the model you use to calculate them. To manage cash, you must manage what you buy and how effectively you use it. The largest expenditure for most companies is capacity; space, labor, materials, equipment, and technology. Unless you model and manage capacity effectively, you will not achieve the cash flow results you seek.
This book introduces capacity management, describes cash flow dynamics, and offers ideas about how to manage both. After reading it, you be able to see, understand, and manage cash flow as never before.
About the Author
Reginald Tomas Lee, PhD, is an executive advisor, author, and researcher. His work and research focuses on helping leaders see, understand, and manage cash flow and capacity. He has worked for such companies as GM, IBM, Oracle, and EY, and has advised a number of well-known companies, including Bristol-Myers Squibb, Burger King, Dell, Disney, DuPont, Fidelity Capital, Hallmark, The Home Depot, IBM, Lockheed, Office Depot, Raytheon, Toyota, and United Healthcare. Reginald is also the author of Explicit Cost Dynamics: An Alternative to Activity-Based Costing and Essentials of Capacity Management. He is the author of several dozens of articles and white papers, reflecting his ideas and experiences solving issues related to capacity, operations, and cash flow. He has a PhD in mechanical engineering from the University of Dayton. Reginald welcomes your feedback and questions. He can be reached at email@example.com or on his website www.reginaldlee.org.
Out of stock