- Conventional Driver-Based Activity Based Costing (ABC)
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- Recognizing the shortcomings of conventional absorption cost accounting, Activity-Based Costing has emerged as a tool whereby product cost distortion, as computed in conventional absorption cost accounting, was to lessened the inaccuracies of ACA. ABC was designed to eliminate the large cost pools and unrealistic allocation methods associated with traditional costing methods. However, the ABC system uses a two- stage process for allocating resource costs first to activities then, in turn, allocating activity costs to cost objects which also creates the potential for significance errors.
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- Expectations associated with many C-level executives are related to their functional responsibilities. For example, the Chief Information Officer (CIO) has direct authority and responsibility over the informational needs of the organization. Similar to the CIO, the Chief Technical Officer (CTO) oversees the technical aspects of the organization while the Chief Marketing Officer provides leadership regarding marketing efforts and the results that those efforts have in promoting the organization’s outputs – all having both authority and responsibility. However, the expectations associated with the Chief Financial Officer (CFO) may not all be directly associated with their functional responsibilities – in some areas, they may have responsibility but little, if any, authority.
- Victor’s 10 Reflections on Leadership - 7. Celebrate the Victories
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- In your seventh observation about leadership you highlight celebrating victories. You note celebrating is important even when things still need to be fixed. I’d like to explore that twist some. Normally we celebrate when we cross the finish line. What does celebrating before the finish line look like?
Governance & Controls – structure and controls.
Transaction Recording – systems, transaction processing and closing the books.
Reporting - efficient, timely and accurate information for decision making and meeting compliance requirements.
Accounting
Business Planning - provide the financial roadmap for the company with supporting analytics.
Financial Forecasting - integrate the company’s current performance relative to budget with the real-time business environment.
Investment Analysis - the framework to analyze new opportunities as they present themselves.
Finance
Cash Management - the discipline to ensure cash is available to operate the business normally.
Funding - Planning for and raising funds to meet the needs of the business.
Risk Management – Identification and mitigation of key business risks.
Treasury
Self-Awareness - Internal.
Team Building - External.
Strategy & Culture – Motivate people to follow you.
Leadership
Four Pillars of Executive Expertise
CFO.University is built around the Four Pillars of CFO Success. These Pillars are supported with Core Competencies. Our framework allows you to master your role as a senior financial officer. The Four Pillars are made up of:
Accounting – Governance & Controls, Transaction Recording and Reporting
Finance – Business Planning, Financial Forecasting and Investment Analysis
Treasury – Cash Management, Funding (Capital Raising) and Risk Management
Leadership – Self Awareness, Team Building and Strategy & Culture
