What gets measured gets managed. If your firm is using financial reports designed for external constituencies to drive internal decision-making, you’re probably creating unnecessary difficulties in managing your enterprise, like running a marathon in the sand.

GAAP financials appropriately provide outsiders a uniform way to compare businesses to each other and across time. But your business is not like other businesses, and it changes over time. Your internal managerial accounting system should make the contribution (or lack of it) from new ideas or shifts in strategy to the company’s overall value immediately visible to the managers and the board.

We look at the specific metrics used in your company, how those metrics relate to each other across functions and organizational levels, and how well those metrics reflect and encourage value-driven behavior. Sometimes specific metrics lead to sub-optimal results. Sometimes the mix or multitude of measures, and how they interact across business units, functions, or management levels creates problems. We can help increase internal transparency relating business activities and results, and a create a clearer line of sight between decision makers and the managers ultimately accountable for their results, or between management and the board.

We can help you:

Adjust certain financial accounting items in order to develop a better managerial accounting system

Align the measures with the business model across business units and levels of decision-making

Incorporate the cost of capital at the level where accountability for capital should exist

Determine appropriate methods for incorporating transfer prices between business units, where they will improve the internal allocation of resources