Accounting and accounting data have taken center stage with managerial decision-making for many decades. As a result, understanding and managing costs, and reporting desirable profit numbers has become the focus of many leaders and executives. The key question, though, is: Should it? Do you need accounting and accounting data to run your company? The answer is: No. Let me explain.
Let’s consider accounting dynamics from two perspectives. One is from hindsight and the other is foresight.
When looking at accounting data in hindsight, you will see a scenario like one seen in Exhibit 16.1.