I recently had an exciting conversation with Kris Moreels, founder and managing partner of B&M Consulting, a firm that specializes in designs of managerial accounting and strategy execution performance management systems. Kris and I share a common history as management consultants engaged by organizations to improve a weak and deficient managerial accounting system. He made the profound statement with which I titled this article, “Is it better to have no costing than bad costing?” What did he mean?

The prevalent thinking is that an organization’s managerial accounting system will calculate costs differently than its financial accounting system. This is because financial reporting must comply with regulatory rules for external compliance reporting typically that oversimplify the rigor required to calculate the relatively more accurate costs from a managerial accounting system. Of course, the culprit here is the allocations of indirect and shared expenses. Traditional cost allocations apply convenient broadly averaged factors, such as using number of department employees or direct labor input hours, to reassign indirect expenses to product costs. more

A reader of my recent blog about the Obama Administration’s international tax proposals sounded a note of exasperation that’s becoming increasingly familiar when corporate tax pros discuss the issue: “Why NOT bring in money from other countries? What’s wrong with putting a McDonald’s in India? It brings money into the organization as a whole, which means they can pay higher salaries,” argued Ralph Comstock.

Sound points, and Ralph might have added that there’s precious little evidence that the President’s proposals will do what they’re intended to do, i.e., increase employment in the United States by curtailing activity in lower-tax jurisdictions abroad.

The day after my post, the Tax Foundation released a report arguing that the Administration’s program will backfire by undermining the competitiveness of U.S. companies, and that it’s taking the U.S. in exactly the opposite direction of most tax authorities around the world. more

We’re the only major industrialized nation that does not have a budget for what it will spend on healthcare this year. Or so David Walker, the former comptroller general of the United States, told me during a recent phone interview. Walker, currently CEO of the Peter G. Peterson Foundation, has been outspoken for years about the country’s growing deficit, and the lucidness of his commonsense oratory has long made him a favorite among rank-and-file comptrollers - a fact that has helped Walker garner some impressive speaker fees on the F&A lecture circuit.

We titled our interview “The Comptroller Who Roared,” in part because comptrollers have not traditionally been thought of as being particularly loud or thought-provoking. The conventional wisdom is that comptrollers deal in day-to-day realities and should be best known for their level heads and sensible solutions. more

Finance Executives Fear Healthcare Reform from BusinessFinanceMag on Vimeo.

Little did we know back in January, when we first surveyed finance executives concerning their company healthcare costs, that we would be debuting the findings of our survey within what appears to be a rather pivotal week for healthcare reform.

Earlier this week, President Obama for the first time provided a detailed road map for what he wants a health overhaul to look like — and today, of course, the president is convening an all-day televised healthcare “summit” at Blair House. The event, seen by many as a political maneuver, is intended to jump-start the reform movement.

No matter what its intended purpose may be, the gathering in Washington serves as an interesting backdrop to the discussions taking place daily inside the finance departments of large, medium-size, and small companies.

That discussion is not about whether finance executives are pro or con healthcare reform. There has always been an acknowledged need for change here, and the possibility of new business opportunities is something finance executives savor along with the rest of business. The healthcare discussion taking place in finance departments really concerns control.

How CFOs View Healthcare Reform

For instance, more than half of the finance executives surveyed believe they will have less control to manage healthcare costs in the wake of reform measures. What’s more, a majority of survey takers (61 percent) believe the legislation lacks personal responsibility for health. more