Innovation Management - Role of the Accounting Function

592 Week 1 DQ 1 WBS Construction PROJ 592 Week 1 DQ 2 Project Cost Estimates and Assumptions PROJ 592 Week 2 DQ 1 Cost Components PROJ 592 Week 2 DQ 2 Estimating Processes PROJ 592 Week 3 DQ 1 Project Schedules PROJ 592 Week 3 DQ 2 Sensitivity Analysis PROJ 592 Week 4 DQ 1 Resource Allocation and Leveling PROJ 592 Week 4 DQ 2 Advanced Schedule Techniques PROJ 592 Week 5 DQ 1 Earned Value Calculation PROJ 592 Week 5 DQ 2 Project Monitoring and Control & EV PROJ 592 Week 6 DQ 1 Forecasting Project Completion Cost PROJ 592 Week 6 DQ 2 Project Control PROJ 592

On the other hand, introducing a product to any market will have significant costs, such as research and development, raw materials, and other production expenses. In most cases, products in the introduction stage of the product life-cycle have negative or low profits until they reach the growth stage due to low sales and high distribution and advertising expenses. To turn a profit, money is needed to find the right distributors to build inventories. The only question is how much cash is worth sinking into the product, but the disadvantage is it is hard to tell if a product is worth it without the proper research and trial and error, which is costly.

internally to establish costs and budgets for the project. The goal is to act according to the curve.

Actual costing is rarely used because managers can’t wait until the end of the year to obtain product costs. Information about product costs is needed as the year goes for planning, control, and decision making.

II. Main Point #2. Contrary to popular belief, Accountants, and the tasks that they perform, are an important part of most people’s everyday life.

As small companies compete, you naturally get market leaders. As these companies get larger they become more efficient at producing goods and services. They invest in mass production techniques in order to produce goods more cheaply than their competitors. They buy raw materials at cheaper prices because they buy in bulk. They expand specialization amongst their workforce. They also copyright and patent their work, preventing rivals from using it. This is known as economies of scale. The bigger you get, the easier it is to make money. Smaller companies cannot compete. This is called a barrier-to-entry. If you wanted to compete with Ford motor cars, for example, just one car plant would set you back around $500 million.

The first proposed action would be the setting up of management objectives for the project and milestones for the project to confirm whether the current cost structure and the present duration is within the scope and objectives of the project. Setting up of milestones would also be ideal for evaluating the project success by looking at the earned value of the project. The evaluation of project success should happen on a continual basis for the project implementing team to have a structure for making changes whenever there are opportunities to hasten the pace of finishing individual tasks.

2. Recommendations: Every budget and project needs a budget. The budget will help with planning and ensure that the team is keeping expenditures under control and also will give the team a target of what needs to be accomplished. The first question the team should ask before undertaking a project is “how much is this going to cost and what the value is to the company? The company needs to have a cost benefit analysis to find out if the cost of the project is justified by the value and benefit it brings into the organization. The projects are supposed to be approved by the finance department before they are undertaken to ensure that there are funds to fund the project.

ABI is using a top-down process in this project, meaning that determination of the final budget comes almost strictly from a compilation of experiences and judgments of the top and mid-level managers in the company. The higher-level managers break down costs into major categories, pass down their cost estimates to the next lowest level, lower-level managers break the major categories down into subcategories and so on until the estimation process reaches the lowest level of the company. By the end, each level knows the specific amount of money that it is allotted to complete the project tasks required at that level. Because the project is so extensive in price and risk, it would have been smarter for them use a bottom-up process which would have involved the employees who would actually be part of the work team so that management could get a more accurate estimate of the time and money that would be required to complete the project.

2.  Beneficial economies of scale.  If you will be larger, will you truly be better?  Some larger companies cannot respond as quickly to market changes due to their size and the challenge coordinating new directions to employees.  Economies of scale are not always beneficial, so make sure you can quantify that having more of one direction is what you want.

Nowadays, accountants establish and comply with a set of common standards by which economic and commercial activity can be identified, measured and analysed. (Davis, 2006) Therefore, decisions about efficient allocations of resources can be made by investors, and it in turn contributes to the economic well-being of society. (ibid.)

What draws me into the field of accountancy? Why do I want to launch a career as a certified public accountant (CPA)? What is there about numbers, spreadsheets, profit and loss statements, audits, inventory and fiduciary responsibility that appeal me? In this paper I will describe in detail the reasons why I am attracted to this field. Also, what are the duties and responsibilities of a CPA? How available are job openings for a person with the education and experience to work as a CPA? How well to companies compensate those hired as CPAs? These questions and issues will be thoroughly reviewed in this paper.

Innovation accounting really is the best way to find out the outcomes for a startup. “This requires a new king of accounting designed for startups-and the people who hold them accountable” (Ries 9). This type of accounting really digs into the not so pleasant aspects of a startup and teaches the fundamental questions of how things will be done. This step requires the entrepreneur to turn his assumptions into a business model. The key this step requires analyzing the simple question of how the customer will profit, how much has to be spent to be able to receive more customers, and lastly the rate of customer that have already purchased. Innovation accounting can show whether or not a startup will succeed or need to make some adjustments for improvement. “An example would be a business that grows through continues fund-raising from investors and lots of paid advertising but does not develop a valuable-creating product (Ries 85). The main focus of the innovation accounting step would be to help see the difference between false growth and startups from true innovators.

* Many IT professionals think that preparing cost estimates is a job for accountants when in fact, it is a very demanding and important skill that project managers need

It is very important that staffs from different backgrounds are engaged in formulating innovative products. In general, the innovation project team should involve the below personnel: •