Scrooge Manning the Books --Dickeson
August 2002
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Remember Bob Cratchitt in the Charles Dickens novel in the 1800s? Wasn't Bob the bookkeeper at a stand-up desk with quill pen and sand box making daily entries in the accounting books of Scrooge Graphics?
Well, Bob Cratchitt lives! Just like Jimmy Dean and Elvis Presley. Tiny Tim now has great grandchildren, but Bob's still there keeping the books at Scrooge Graphics. Now he has a computer to replace his quill pen, but he's still using the same system. He's still cranking out balance sheets and income statements two weeks after the close of the month.
Trying to use general ledger financial statements for management is, as one writer puts it, trying to steer the car by watching the yellow line in the rear-view mirror. GLA facts are artifacts available only weeks after the close of some period.
We've agonized for years with the clumsiness of those months based on moon phases, developed by Pope Gregory and Julius Caesar. Some of us now use three months of 4-4-5 seven-day weeks to make sense of a quarter. We're still confused by ancient asset values being depreciated into "reserves" that have no value and all of the adjustments Cratchitt and the accounting rabbis must make.
Sneaking More Sales
Frustration sets in with those first-in/still-here inventory valuation rules. And then there's the fudging—like holding the month open for a few days to sneak in some more sales or putting expenses into work-in-process inventory for momentary profit cosmetics. Oh, what tangled webs we weave when first we fumble to achieve.
It's time—it's past time—for us to move to a system of weekly cash basis accounting for commercial printing. We have to predict to manage, and the numbers must be logical and readily understandable.
Go ahead and let Bob keep doing your cost accounting and general ledger books as you always have, but put the reports in a dark closet. Get them out only for tax purposes and for bankers who need paper records to satisfy bank examiners and who believe in the living Cratchitt.
We must have decision support information by 8 a.m. every Monday morning following the close of a week, not two weeks following the close of some moon phase. Put the week's numbers in the context of a rolling quarter of 13 weeks.
Those of us involved in management of printing companies have known for years that Budgeted Hourly Rates were misleading nonsense—not usable for current predictions and decisions. No surprise at all that modern scholars and writers no longer commend cost accounting as a management decision support.
Well, Bob Cratchitt lives! Just like Jimmy Dean and Elvis Presley. Tiny Tim now has great grandchildren, but Bob's still there keeping the books at Scrooge Graphics. Now he has a computer to replace his quill pen, but he's still using the same system. He's still cranking out balance sheets and income statements two weeks after the close of the month.
Trying to use general ledger financial statements for management is, as one writer puts it, trying to steer the car by watching the yellow line in the rear-view mirror. GLA facts are artifacts available only weeks after the close of some period.
We've agonized for years with the clumsiness of those months based on moon phases, developed by Pope Gregory and Julius Caesar. Some of us now use three months of 4-4-5 seven-day weeks to make sense of a quarter. We're still confused by ancient asset values being depreciated into "reserves" that have no value and all of the adjustments Cratchitt and the accounting rabbis must make.
Sneaking More Sales
Frustration sets in with those first-in/still-here inventory valuation rules. And then there's the fudging—like holding the month open for a few days to sneak in some more sales or putting expenses into work-in-process inventory for momentary profit cosmetics. Oh, what tangled webs we weave when first we fumble to achieve.
It's time—it's past time—for us to move to a system of weekly cash basis accounting for commercial printing. We have to predict to manage, and the numbers must be logical and readily understandable.
Go ahead and let Bob keep doing your cost accounting and general ledger books as you always have, but put the reports in a dark closet. Get them out only for tax purposes and for bankers who need paper records to satisfy bank examiners and who believe in the living Cratchitt.
We must have decision support information by 8 a.m. every Monday morning following the close of a week, not two weeks following the close of some moon phase. Put the week's numbers in the context of a rolling quarter of 13 weeks.
Those of us involved in management of printing companies have known for years that Budgeted Hourly Rates were misleading nonsense—not usable for current predictions and decisions. No surprise at all that modern scholars and writers no longer commend cost accounting as a management decision support.
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Best Practices for Print Automation
Printing Production Management
