Profitability and Cost Management

Why is it that so many otherwise professional companies are struggling to identify profit and loss factors? Many of them do not know how much a client, product or service contributes and are unaware of the mechanism behind increasing costs. One could argue that it is irrelevant whether your organization is still profitable if you are clueless as to what actually makes the organization profitable or unprofitable. This is the central question in this book: couldn’t your company be more profitable if you did know? While virtually all books on this subject put trading and manufacturing companies center stage, this book looks at the domain of service companies, such as banks, hospitals, transport companies, shared services organizations, professional service firms, and IT firms. Using real-life cases set in various industries, this book offers a project-based improvement of cost accounting and profitability analysis. After an introduction to cost accounting and activity-based costing, this book provides best practices to improve cost and profit transparency. These practices clarify both the methodology and the required role change for controllers, managers, and directors in improving insight into the costs and profitability of products, services, and customers. Koen Perik is a partner at Amsterdam-based consulting firm SIS Finance. He works to improve management and cost accounting at medium-sized and large enterprises and at government agencies.