Preparing for accounting system changes

Article Abstract:

Just-in-time (JIT) manufacturing methods require new cost management measures based on activity-based accounting which identify those activities that products consume and those resources consumed by the activities. Activity-based accounting produces more accurate product costs by tracing the amount of activity volume consumed by products. The application of activity-based accounting should serve to emphasize the simplicity principle underlying JIT; should be used as an opportunity to rationalize those production processes the activities support; and should be used as a management tool. Successful implementation requires early involvement in JIT and total quality management efforts, training staff in continuous improvement techniques and problem solving, placing accountants on the factory floor, and strict adherence to continuous improvement principles in accounting work.

Accounting and auditing, Just in time inventory systems, Just in time systems

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Making accounting a value-added activity

Article Abstract:

Organizations should subject their accounting activities to a cost-benefit analysis and eliminate activities that do not add value. The factors that can detract from the value of a firm's accounting system include budget-induced sales behavior, the presence of accounting reserves, and meetings to discuss variances in the budget. Value-added accounting systems are those that emphasize simplicity, encourage cooperation and continuous improvement, and consider relevant issues.

Analysis, Usage, Cost benefit analysis, Value added

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