throughput accounting: Does the balanced scorecard add value?

Throughput accounting is a management accounting approach that focuses on the throughput of cash from sales and the truly variable costs of producing an additional unit of a product or service.


Throughput is the amount of time needed to get a product through the production process. Enabling faster throughput, shorter manufacturing lead times, and reduces the amount of inventory needed to support customer service objectives lowering production costs. Management accounting has undergone significant evolution moving away from rigid budgeting programs and static output measures to comprehensive approaches of value identification and measurement.


you should allow you to set up what is essentially a virtual office to give you the flexibility of connecting to your business anywhere, any time. Data management is an administrative process that includes acquiring, validating, storing, protecting, and processing required data to ensure the accessibility, reliability, and timeliness of the data for its users.


The theory of constraints is an important tool for operations managers to manage bottlenecks and improve process flows. Capacity is the maximum level of output that a company can sustain to make a product or provide a service. Throughput time is reduced, resulting in greater potential output and quicker response to customers. Data transfer rates for disk drives and networks are measured in terms of throughput.


Cost accounting is a valuable tool you use to reduce and eliminate costs in a business. Focus on your business while your finance professionals handle all of your accounting needs. Management accounting refers to a function of tracking internal cost for any business process that helps your organization, firm or an individual in making decisions related to production, operation and investment in market.


Too small a sample yields unreliable results, while an overly large sample demands a good deal of time and resources. Modern best practices for procurement enables you to improve spend management, streamline purchasing, and achieve higher margins. Accounting service generally refers to the service of recording and reporting of financial position of a business as well as interpreting and communicating the position for decision making.


Learning how to calculate profit margin is a cornerstone of good business financial practices. However, unlike cost accounting, which primarily focuses on cutting costs and reducing expenses to make a profit, throughput accounting basically emphasizes generating more throughput. Accounting, financial and management reporting, financial analysis, and monitoring, measuring, and improving business performance.


Throughput accounting provides the business intelligence used for maximizing profits. Throughput contracts provide a portion of the collateral or guarantees required to obtain project financing. Organizations should try to maximize the throughput accounting ratio by making process improvements or product specification changes. Increase efficiency and throughput and reduce cycle times with intelligent business processes that drive growth.

Want to check how your throughput accounting Processes are performing? You don’t know what you don’t know. Find out with our throughput accounting Self Assessment Toolkit: