The Monetary Value of Time : Why Traditional Accounting Systems Make Customers Wait

Although there are numerous books on alternative accounting methods, such as Lean accounting, none focus on the impact of time and how accounting practices can be modified to acknowledge the power of time. This book addresses this need.

The Monetary Value of Time: Why Traditional Accounting Systems Make Customers Wait presents a framework for assessing the value of time in terms of organizational strategy and competitive advantage. The framework presented will enable organizations to develop consistent measures and ensure that their cost accounting system isn’t motivating behaviors that add to lead time and make customers wait.

The framework outlined in this book is relevant to the managerial and cost accounting practices in today’s manufacturing environment, which is increasingly moving away from mass production to custom manufacturing. The framework is supported by high-level metrics, which are reinforced by operational metrics. This is supported by accounting data that recognize the value of time. Pricing models that incorporate the concept of time are presented.

The book provides many examples of how the use of standard costing and traditional accounting practices in a high-mix/low-volume production environment can produce contradictory or even inaccurate results that form the basis for poor decisions that may actually move your organization farther from its objectives.

The book arms readers with options for overcoming traditional barriers by applying direct costs at an item level, while applying overheads at a macro or value stream level. For example, while GAAP requires overhead application for inventory valuation, a common misconception is that overhead must be applied at an item level. In fact, overhead can be absorbed by one journal entry.

Demonstrating the linkages between time-based accounting data and meaningful business metrics that drive bottom line results, the book presents methods and metrics that have been successfully applied by the author in manufacturing environments.

• Presents a framework for relevant managerial and cost accounting practices in today’s manufacturing environment
• Supplies many examples of how the use of standard costing and traditional accounting practices in a high-mix/low-volume production environment can produce contradictory, and even, inaccurate results that form the basis for poor decisions
• Provides options for overcoming traditional barriers by applying direct costs at an item level, while applying overheads at a macro or value stream level
• Demonstrates the linkages between time-based accounting data and meaningful business metrics that drive bottom line results
• Details methods and metrics that have been successfully applied by the author in manufacturing environments

Author
Introduction

Chapter 1 : Net Present Value : Just the Tip of the Iceberg
Chapter 2 : Velocity Improves Productivity and Working Capital
Chapter 3 : Case Study : Velocity Impact on Results
Chapter 4 : Product Cost
Chapter 5 : What Does GAAP Have to Do with It?
Chapter 6 : Variation, of Stuff Happens
Chapter 7 : Labor : Direct or Indirect? Cross-Trained or Specialized?
Chapter 8 : Simplified Time-Based Accounting
Chapter 9 : Pricing Strategies under High Mix / Low Volume
Chapter 10 : Is Inventory a Liability or as Asset?
Chapter 11 : More on Simplified Time-Based Accounting
Chapter 12 : Time-Based Metrics
Chapter 13 : Time-Based Cost Justifications
Chapter 14 : A Road Map for Implementing Time-Based Accounting
Chapter 15 : Making Customers Wait

References
Index