The service sector: investing in new technology to stay competitive

Article Abstract:

The accounting department of service sector firms often have difficulty legitimating investments in new technology to senior management. Investing in new technology is often the critical edge that gives service firms a competitive advantage, but managerial accountants often find it difficult to quantify anticipated benefits. One technique for quantifying investments in technology is by abandoning the status quo as an alternative to investing in new technology. Instead, lost contribution margins should be substituted for the status quo. Lost contribution margins will illustrate the amount of businesses lost because the firm did not maintain a competitive edge by investing in new technology.

Accounting, auditing, & bookkeeping, Investments, Capital budgets

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Measuring productivity in a service company

Article Abstract:

Productivity measurement techniques at a freight forwarding company are discussed to show that productivity measurement is not restricted to manufacturing companies. Revenue is defined as net revenue. Benchmarks for establishing productivity standards are derived by comparing a company's performance to that of its competitors over a period of years. The competitors selected should be reasonably compatible in terms of size and market aggressiveness. Methods for calculating performance measurements are discussed.

Freight forwarders, Labor productivity

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