Profitability and Cost Management

Preface 1
1 Introduction 3
1.1 Insight into cost and profit 3
1.2 Management and cost accounting 6
1.3 The development of management and cost accounting from 1920 to today 8
1.4 Market forces are the best accelerant 10

2 Management accounting and activity-based costing 13
2.1 Management accounting 13
2.2 Activity-based costing 15

3 Tasks of the finance function 19
3.1 You can’t manage finances without cost transparency 19
3.2 More or fewer controllers? 21
3.3 The difference between management accounting and financial accounting 24
3.4 Administrative processes 27
3.5 A finance manager’s responsibilities 30

4 Four perspectives on management and cost accounting 35
4.1 The financial management model 35
4.2 Responsibility accounting 37
4.3 Costing 41
4.4 Transfer prices 49

5 Features of effective management and cost accounting 55
5.1 Introduction 55
5.2 Insight into profit margins and efficiencies 57
5.3 Focus on content and form 61
5.4 Processes, organization, and products are the basis 63
5.5 From information overflow to one-pager 64
5.6 Cost accounting integrated into the planning and control cycle 66
5.7 Annual cost model evaluation 66

6 Management and cost accounting by industry 69
6.1 Financial institutions 69
6.2 Transport 74
6.3 Hospitals 79
6.4 IT departments 83
6.5 Telecommunications, cable, and energy companies 87
6.6 Manufacturing 94

7 Shared services and internal charging 101
7.1 Support services: R&D, HR, finance 101
7.2 Internal charging of costs at large corporations and institutions 105
7.3 Service level agreements (SLAs) and internal charging 110

Notes 115