As an accountant I like nothing better than a good set of numbers to consider. The problem is that numbers are only meaningful if they are used for the purpose for which they were prepared. That’s why we must remember that accounts are not designed for effective decision making. The…
Coming from a qualified accountant you may find the above statement somewhat surprising. We looked at this topic before in Why Effective Leaders Don’t Use Accounts To Make Decisions and it’s time to look again. Let’s see why accounts are not effective. All the old-fashioned banks would disagree with me. If…
Accounts were never designed for decision making. They are for recording and reporting upon historical transactions and that’s why effective leaders don’t use accounts to make decisions. Accounts are valuable for what they are designed to do and that is report past income and sunk costs. We have already discussed…