It's (Past) Time to Kill a Word - Allocation

Revenue management is often not as easy to define in a company as fixed and variable costs. In this podcast, Daniel Burnside hosts revenue management expert Karl Aschwanden for a discussion about what expected revenues should be and how they can be facilitated through revenue modeling for new businesses. For more info on this topic, please visit www.profitability-analytics.org

In this podcast, we interviewed Paulo Jorge Ribeiro, CFO, OLI - SISTEMAS SANITÁRIOS, S.A. about using, profitability analytics, business intelligence, AI and other technology to improve financial management and strategic planning. Paulo has had a great deal of success implementing these technologies at OLI, and making a positive impact for management and OLI's profitability. Learn more about profitability analytics for finance, and other similar subjects from Profitability Analytics Center of Excellence (PACE) at www.profitability-analytics.org.

In this episode, Larry White explores why the word “allocation” should be eliminated from internal decision support vocabulary. He argues that true managerial costing must reflect causality—clear cause-and-effect relationships—rather than vague or manipulable “rational bases.” Larry calls for a shift from traditional cost accounting to ethical, decision-relevant “causal assignments” that support sound internal management decisions.For more information like this visit www.profitability-analytics.org

Many organizations treat plans, budgets, and forecasts as political tools rather than effective management instruments, often manipulating numbers to align with executive expectations rather than reality. In this podcast, Doug Hicks tells us about his experience as a controller and consultant and how it revealed that these processes frequently prioritize job security over decision-making, a trend exacerbated by non-causality-based predictive cost models that allow for superficial yet misleading results. However, by adopting causality-based models, organizations can ensure their financial planning reflects true operational economics, leading to more informed decisions, better performance tracking, and actionable insights. The PACE, Profitability Analytics Framework offers a solution by grounding plans, budgets, and forecasts in predictive, causality-driven methodologies, transforming them from empty rituals into valuable management tools.Learn more from www.profitability-analytics.org

In this podcast we interviewed Benjamin Kofi Quansah about "Beyond the numbers: Leadership Values of High Impact Management Accountants."We asked him:1. What does it mean to go “beyond the numbers” as a management accountant, and why is it crucial in today’s business environment?2. In your experience, what leadership values are essential for management accountants to be truly impactful?3. How can management accountants influence organizational strategy while maintaining ethical standards?4. What role does communication play in the effectiveness of management accountants as leaders, and how can they improve this skill?5. What are some practical steps for transitioning from a technical accountant to a strategic leader in the field?6. Can you share examples of how high-impact management accountants have driven change or innovation in their organizations?Join Raef Lawson and Benjamin Kofi Quansah as they explore these questions. For more podcasts, visit our website or your favorite podcasting channel.

In this episode, Doug Hicks discusses how in profitability analytics, valid models that accurately reflect underlying economic realities are more critical than the accuracy of the data populating them, as flawed models lead to misleading results even with precise data. While both models and data are important, a valid model can provide reasonably accurate insights with estimated data, whereas an invalid model will generate erroneous outcomes regardless of data accuracy. To learn more, visit www.profitability-analytics.org.

In this podcast, Doug Hicks discusses how management accounting offers numerous methodologies, each addressing specific cost-related challenges, but no single approach provides a comprehensive solution. Instead of selecting one method from a menu of options, businesses should integrate the core principles of these methodologies into a tailored, causality-based cost model that accurately reflects their unique economic structure and supports informed decision-making. To learn more, visit www.profitability-analytics. org

In this podcast, Larry White argues that management accounting should prioritize playing an "offensive" role within organizations, focusing on driving growth and profitability by developing new markets, customers, and revenue opportunities, rather than solely acting as a "defensive" function of oversight and control. By emphasizing better revenue management, more accurate managerial costing, and a comprehensive approach to investments, the author contends that accountants can become proactive contributors to organizational success rather than merely protectors against loss. Learn more about PACE at www.profitability-analytics.org.

In this podcast, Doug Hicks emphasizes the importance of using accurate and effective models in corporate finance to make better business decisions. It highlights that while people create models to understand complex phenomena, the quality of these models directly impacts decision-making. The discussion contrasts outdated models with modern economic cost models, arguing that businesses should use forward-looking, causality-based economic cost models rather than backward-looking cost accounting models. Such economic models, which accurately project costs and consider future impacts, are crucial for making informed and effective decisions in organizations. For more information, visit PACE at www.profitability-analytics.org

Doug Hicks shares his observations from over five decades of working with small and mid-sized businesses on pricing strategies. Pricing remains a top 10 business topic, but many organizations still treat it simplistically, merely adding a markup to estimated costs. This often leads to unrealistic expectations and financial disappointments, as market conditions, not costs, determine the price. Many businesses also rely on outdated cost accounting systems that don't reflect true economic conditions, leading to flawed pricing decisions. By developing causality-based cost models, companies can more accurately assess costs and make strategic pricing decisions that optimize overall profitability. These models are particularly crucial for strategic pricing, enabling organizations to allocate fixed resources effectively and measure true value by considering investments. Furthermore, basing sales commissions on profitability or value added, rather than sales percentages, can prevent value erosion. Learn more by visiting PACE at www.profitability-analytics.org