In this podcast, we interviewed Paulo Jorge Ribeiro, CFO, OLI - SISTEMAS SANITÁRIOS, S.A. about using, profitability analytics, business intelligence, AI and other technology to improve financial management and strategic planning.

Paulo has had a great deal of success implementing these technologies at OLI, and making a positive impact for management and OLI's profitability.

Learn more about profitability analytics for finance, and other similar subjects from Profitability Analytics Center of Excellence (PACE) at www.profitability-analytics.org.

In this episode, Larry White explores why the word “allocation” should be eliminated from internal decision support vocabulary. He argues that true managerial costing must reflect causality—clear cause-and-effect relationships—rather than vague or manipulable “rational bases.” Larry calls for a shift from traditional cost accounting to ethical, decision-relevant “causal assignments” that support sound internal management decisions.

For more information like this visit www.profitability-analytics.org

Many organizations treat plans, budgets, and forecasts as political tools rather than effective management instruments, often manipulating numbers to align with executive expectations rather than reality. In this podcast, Doug Hicks tells us about his experience as a controller and consultant and how it revealed that these processes frequently prioritize job security over decision-making, a trend exacerbated by non-causality-based predictive cost models that allow for superficial yet misleading results. However, by adopting causality-based models, organizations can ensure their financial planning reflects true operational economics, leading to more informed decisions, better performance tracking, and actionable insights. The PACE, Profitability Analytics Framework offers a solution by grounding plans, budgets, and forecasts in predictive, causality-driven methodologies, transforming them from empty rituals into valuable management tools.

Learn more from www.profitability-analytics.org

In this podcast we interviewed Benjamin Kofi Quansah about "Beyond the numbers: Leadership Values of High Impact Management Accountants."We asked him:1. What does it mean to go “beyond the numbers” as a management accountant, and why is it crucial in today’s business environment?2. In your experience, what leadership values are essential for management accountants to be truly impactful?3. How can management accountants influence organizational strategy while maintaining ethical standards?4. What role does communication play in the effectiveness of management accountants as leaders, and how can they improve this skill?5. What are some practical steps for transitioning from a technical accountant to a strategic leader in the field?6. Can you share examples of how high-impact management accountants have driven change or innovation in their organizations?Join Raef Lawson and Benjamin Kofi Quansah as they explore these questions. For more podcasts, visit our website or your favorite podcasting channel.

In this episode, Doug Hicks discusses how in profitability analytics, valid models that accurately reflect underlying economic realities are more critical than the accuracy of the data populating them, as flawed models lead to misleading results even with precise data. While both models and data are important, a valid model can provide reasonably accurate insights with estimated data, whereas an invalid model will generate erroneous outcomes regardless of data accuracy.

To learn more, visit www.profitability-analytics.org.

In this podcast, Doug Hicks discusses how management accounting offers numerous methodologies, each addressing specific cost-related challenges, but no single approach provides a comprehensive solution. Instead of selecting one method from a menu of options, businesses should integrate the core principles of these methodologies into a tailored, causality-based cost model that accurately reflects their unique economic structure and supports informed decision-making.

To learn more, visit www.profitability-analytics. org

In this podcast, Larry White argues that management accounting should prioritize playing an "offensive" role within organizations, focusing on driving growth and profitability by developing new markets, customers, and revenue opportunities, rather than solely acting as a "defensive" function of oversight and control. By emphasizing better revenue management, more accurate managerial costing, and a comprehensive approach to investments, the author contends that accountants can become proactive contributors to organizational success rather than merely protectors against loss.

Learn more about PACE at www.profitability-analytics.org.

In this podcast, Doug Hicks emphasizes the importance of using accurate and effective models in corporate finance to make better business decisions. It highlights that while people create models to understand complex phenomena, the quality of these models directly impacts decision-making. The discussion contrasts outdated models with modern economic cost models, arguing that businesses should use forward-looking, causality-based economic cost models rather than backward-looking cost accounting models. Such economic models, which accurately project costs and consider future impacts, are crucial for making informed and effective decisions in organizations. For more information, visit PACE at www.profitability-analytics.org

Doug Hicks shares his observations from over five decades of working with small and mid-sized businesses on pricing strategies. Pricing remains a top 10 business topic, but many organizations still treat it simplistically, merely adding a markup to estimated costs. This often leads to unrealistic expectations and financial disappointments, as market conditions, not costs, determine the price. Many businesses also rely on outdated cost accounting systems that don't reflect true economic conditions, leading to flawed pricing decisions. By developing causality-based cost models, companies can more accurately assess costs and make strategic pricing decisions that optimize overall profitability. These models are particularly crucial for strategic pricing, enabling organizations to allocate fixed resources effectively and measure true value by considering investments. Furthermore, basing sales commissions on profitability or value added, rather than sales percentages, can prevent value erosion.

Learn more by visiting PACE at www.profitability-analytics.org

In this podcast, Doug Hicks, a director at PACE, discusses a significant gap in accounting education: the lack of historical context for the ideas being taught. Hicks argues that without understanding the history and reasoning behind accounting practices, students may end up just memorizing rules without grasping their true purpose.

Hicks concludes that management accounting, unlike financial accounting, should focus on understanding economic realities and adapting to specific situations rather than just following set rules. He calls for a new approach to teaching management accounting to better prepare accountants for modern economic challenges. He invites listeners to share their thoughts on this topic.

For more information on this topic, visit www.profitability-analytics.org

Larry White discusses the importance of operational versus financial metrics. Initially, it may seem that both are equally important, but he explores this further. In manufacturing, traditional methods of inventory valuation and product costing have led to distorted information, which operations personnel have often disregarded. Despite this, manufacturing efficiency, quality, and performance have dramatically improved due to a focus on operational metrics rather than financial data. These operational improvements have led to better financial outcomes, not the other way around. From Larry's experience, only a small percentage of manufacturing professionals find accounting and finance information useful. To address this, the PACE model ensures that operational models form the basis for financial modeling, emphasizing causality and a broader view of costs, including customer and sales-related expenses. Effective decision-making should consider various costing dimensions and focus on long-term success. So, which metrics do you think are more important: operational or financial? To find out more about this topic, visit www.profitability-analytics.org

When you are already manufacturing 5 million pounds of candy, what does it REALLY cost to produce the next pound, 1,000 pounds, or even one million pounds?

In this edition of our PACE Leaders in Business podcast, we chatted with Jay David of Do Business Better about this very topic. Jay has had a very interesting career path that gives him a unique perspective on business. In this 20 minute podcast, we covered:

💥 His career journey so far

💥How his background gave him a different perspective on business

💥How he transitioned into Operations

💥What he saw from the Operations position that led him to change his thoughts on Cost Accounting

💥Jay's definition of product cost (a little different!)

💥Why product cost a bad thing to use as a basis for performance measurement

and more.

To learn more on this and other subjects, visit the ⁠PACE website⁠ and follow our ⁠LinkedIn⁠ and ⁠X/Twitter ⁠page.

In this podcast, we interviewed Dawn Ringrose, Principal at Organizational Excellence Specialists. Dawn filled us in on some of the basics of Organizational Excellence.

Since 2015, Organizational Excellence Specialists has spearheaded an extensive global research initiative, delving into the state of organizational excellence across various sectors, sizes, and regions. In this podcast we covered the following:

💠What is an excellence model?

💠Who developed the first excellence models?

💠Who uses excellence models?

💠Are excellence models updated?

💠What are the latest developments in excellence models?

💠How do we know excellence models work?

💠What is a balanced system of measurement?

💠What is the awareness about excellence models across the working population?

💠Why is there low awareness about excellence models?

💠How does an excellence model compare to other improvement approaches?

To learn more on this and other subjects, visit the ⁠PACE website⁠ and follow our ⁠LinkedIn⁠ and ⁠X/Twitter ⁠page.

What does that term actually mean??
Terms that are not well understood can lead to ill-considered actions.
In Larry White's podcast on "Problem Terminology in Accounting and Business", he rightly points out that customers or users who are often confused or bewildered about what they may need, may retreat back to the world of regulatory reporting because it feels more concrete.
But regulatory reporting is not helpful for them to make better business decisions.
Here are some of the terms for which he provides definitions.
💠 Financial Internal Decision Support Information
💠 Management Accounting
💠 Cost Accounting
💠 Managerial Costing
💠 Financial Accounting
💠 Profitability Analytics To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and X/Twitter page.

Are you using the laws of man or the laws of nature in Finance and Accounting?

In this podcast, Doug Hicks, CPA, tells us how causality-based revenue, operating, and investment models must be populated with data that reflect the laws of nature, not the laws of man, to aid decision makers in developing the kind of comprehensive and relevant decision support information they need to optimize their organizations’ financial performance. To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.

In this NEW podcast, Doug Hicks, CPA uses an excerpt from his book “Profitable Expectations: An Accountant Rising to the Challenge” to demonstrate an important point about using weights in modeling to better understand costs and get insights on your company. He does this through an excerpt from his book describing a discussion between an accountant and her mentor on using weights in modeling in a pet boarding company to better understand looking after cats and dogs, and how this impacts the cost to the company.

To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.

In this new podcast, Doug Hicks talks about his experience with decision makers that are employed by business owners to manage their organizations falling into two major categories: those who view their organization as if it were a living entity and those who view it as if it were a game.

Those viewing their organization as a living entity act as if they were given stewardship of the organization during a particular period of its life. We’ll call these individuals stewards. Their objective is to pick up where the previous steward left off and provide the organization with the guidance and nurturing necessary to continue its development until the time comes to transfer their stewardship of the organization to another individual.

Those viewing their organization as a game (we will call these individuals game players), see their organization as a contest in which they must run up the highest score from the time they begin the game until they are either dismissed or find another game to play.

To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.

"The story goes that every day, Shahryar the king would marry a new virgin and every day he would send yesterday's wife to be beheaded. This was done in anger, having found out that his very first wife had been unfaithful to him. He had killed one thousand such women by the time he was introduced to Scheherazade, the Vizier’s daughter. But she was able to captivate the King each night by telling a wonderful story, but leaving it unfinished until the next night. This way, the King spared her life one night at a time so he could hear the end of the story, and then she would start the next leaving it unfinished.

Does that sound familiar? At predetermined intervals, usually each month or each quarter, the CEO must report progress against set targets and tell a great story that will hold the attention of the shareholders. If targets are met or exceeded, the CEO remains employed. If they are not, the CEO’s continued employment is jeopardized.  Too many intervals with targets that are not met and our CEO is let go and a new one hired.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.

Do you understand the entire spectrum of economic radiation or only a small part of it?

In this new podcast, Doug Hicks compared advances in how we see things with only our naked eyes and then interpret the universe, and how we are now able to see much more with tools to enhance our vision.

Visible light is electromagnetic radiation that we, as humans, can detect with our naked eyes. Aided by tools, humans can now “see” and measure things that are invisible to the naked eye; from low frequency, low energy radio waves to high frequency, high energy gamma rays.

Financial accounting is the decision maker’s visible light. Through the eye of financial accounting, a decision maker can detect and measure only the economic radiation that happens to fall within financial accounting’s “visible range.” Financial accounting does not detect and measure all of the economic radiation lurking in the universe, only the radiation within its limited range.

Predictive, causality-based operating and economic cost models, like those promoted in the Profitability Analytics Framework, provide visibility along a much wider range of the economic radiation that permeates the universe.

To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.

In this podcast, we interviewed Varun Jain, Co-Founder and CEO of Miles Education. Varun founded Miles Education to help create opportunities for others, like he had for himself, and create a talent pool for many big public accounting firms that hire many people in India focusing on building the talent supply chain of CPAs, CMAs. There is a huge shortage of accountants in the workforce, especially in the USA, which Miles Education is hoping to improve with talent from India. we also spoke about other subjects such as the use of the Profitability Analytics Framework, and trends for the remainder of 2023.

To learn more on this and other subjects, visit the PACE website and follow our LinkedIn and Twitter page.