PACE Moments: Recent Episodes
Profitability Center of Excellence
PACE Moments, brought to you by the Profitability Analytics Center of Excellence, brings you experts and thought leaders who discuss the many aspects of corporate finance and analytics that will help organizations make better, more informed decisions. Follow us on LinkedIn https://tinyurl.com/23jeub23 and visit our website https://tinyurl.com/rc79n25b for more information.
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 AnalyticsTo 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.
In this podcast we interviewed Edward Roske who is the CPO (Chief Performance Officer) for Argano worldwide. We talked about how much Argano has grown by acquisition as well as organically all over the world, trends that he sees for 2023, how Argano is using the Profitability Analytics Framework at Argano, the 7 step method they are using to implement it, and how revenue management is very important to Argano's business model. Edward has written/co-written more than a dozed books, is a well known and entertaining speaker, and has visited 72 Countries (so far) and consulted in most of them helping organizations with Enterprise Performance Management.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
Aliyyah holds a management role in the Recycling Council of B.C. in Canada and is a freelance writer. In addition to her finance responsibilities, she specializes in helping companies with the psychology of change management. She helps each person understand that they play an important role in change, celebrates small wins, and gains the trust of others. Aliyyah is a big believer in everyone understanding how they are related to and add value to the company strategy and in this episode she talks about this and also her thoughts on data security, future trends, sustainability, and more.To learn more on this and other subjects, visit and become a member of the PACE website (no cost) and follow our LinkedIn and Twitter pages.
The capital preservation allowance thought experiment? What's that?
We all know that the depreciation expense on an income statement measures the decline in the value of a firm’s fixed assets during the period, and the amount which needs to be replaced over time to maintain the firm’s productive capacity, right? WRONG! While depreciation expense may be a useful concept for external financial reporting, it fails completely when applied to managerial cost information used to support internal decision making. Doug Hicks leads us through an interesting thought experiment involving a family-owned business that needs to maintain its productive capabilities for future generations.
To learn more on this and other subjects, visit and become a member of the PACE website (no cost) and follow our LinkedIn and Twitter pages.
In this podcast we interviewed Asif Masani who is a Financial Planning and Analysis Manager for Coursera in India. We talked about how the Profitability Analytics Framework supports work in FP&A, trends that Asif sees for FP&A going forward, his new book "All About FP&A", and how he is working toward his goal of helping 1 million people learn about and master FP&A.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
In this podcast, we interview Prashanth H Southekal, PhD, MBA, ICD.D who leads the Data Analytics interest Group for PACE and also recently published his 3rd book “Data Quality: Empowering Businesses With Analytics And AI”. We talked about how Business Analytics and AI support accounting and finance, where he sees them going in the future, how the Profitability Analytics Framework is supported by Business Analytics and AI, and got some sage advice from Pranshanth's business journey to date. Please check out more content at www.profitability-analytics.com
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
Anders Liu-Lindberg is a co-founder of the Business Partnering Institute and social media influencer. In this episode we find out why becoming a business partner is so important for finance now, where he sees the future of the profession going, and how the PACE Profitability Analytics Framework supports business partnering for finance so well. If, as a finance professional, you find yourself frustrated and running from reporting period to reporting period, this podcast is for you. Anders talks about breaking free of that cycle now and for the future by becoming a business partner.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
To learn more about business partnering or to contact Anders Liu-Lindberg, visit their website
Many of our PACE Forum podcasts have a recurring message: To nudge, and more strongly push, CFOs and accountants to get out of the 1960s and into the 21st century by applying and using progressive management accounting methods. The problem begins with the imbalance of emphasis of external statutory and compliance financial reporting for government regulatory agencies (e.g., the USA’s SEC) dominating over internal management accounting. The purpose of the former is for “valuation” (e.g., inventories, cost of goods sold) whereas the latter’s purpose is for “creating financial value” for shareholders and owners by providing insights for better decisions. Learn more in this podcast from Gary Cokins.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
Management accounting has been very methodology focused since the advent of Activity Based Costing, now almost 50 years ago. Profitability Analytics focuses on principles and deep understanding. Understanding principles guides you to an effective methodology for your organization.Money is generally a lagging indicator for revenue, cost, and investment performance. A central tenant of the IMA Conceptual Framework for Managerial Costing and the Profitability Analytics Framework is that an effective, causal cost model is an operational model (of resources and processes) that is costed. Going straight to a cost model creates a severe disconnect from reality, understanding, and useability. Larry White discusses this topic.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
Management accounting should enthusiastically embrace the concept of professional optimism! It is truly a differentiator within the accounting profession. Business needs accountants who focus on creating possibilities and designing new solutions. Larry White discusses how the change in the International Code of Ethics for Professional Accountants (published by the International Federation of Accountants and the International Ethics Standards Board for Accountants) affected professional optimism.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
Two similar stories. One from two centuries ago, and the other present day. In each case the navigator (the management accountant in the present day) knew his equipment was faulty and that he was providing the captain (executive) with bad information on which to base important decisions that would adversely affect a lot of people. Instead of informing the captain (executive) he kept it to himself leading to disaster. Hear the stories as told by Doug Hicks, and how the management accountant could do things differently and become the hero of the story instead of the villain.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
Some of the “expenses” recorded in financial accounting should be treated as “investments” and some amounts not spent during a financial accounting period included as “expenses.” Doug Hicks, CPA discusses why and when this should be the case.
It's important to distinguish between measurements made from the financial accounting perspective and those made from the managerial accounting perspective.
Periodicity is important in financial accounting. Expenses are measurements of the resources consumed during a specific period of time using measurable and auditable historical information in compliance with man-made rules and regulations.
Managerial accounting, on the other hand, is more concerned with the long-term, sustainable economics of an organization. Expenses are measurements of the resources that need to be consumed for the organization to sustain its business over the long-term whether or not those resources are consumed during a specific period of time. Find out more in this podcast.
To learn more on this and other subjects, visit the PACE website and follow our LinkedIn page and Twitter page.
In the teaching profession, there is an ongoing debate over the value of standardized testing – testing designed to measure the performance of both the student and the educator. One of the more powerful arguments against standardized testing – or at least standardized testing in its current form – does not relate to the testing itself but to one of its unintended consequences. That unintended consequence is “teaching to the test” instead of teaching a core curriculum and critical thinking skills. When this problem exists among the organization’s C-level executives, it usually permeates throughout the entire organization. Managing to the test turns decision makers into “game players” instead of “stewards” that work for the long-term success of the organization. Hear more from Doug Hicks about the issue and a remedy in this podcast. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
A gatekeeper is an individual who controls access to something. Ancient cities had gatekeepers whose job was to keep out undesirables. A college admissions officer is a gatekeeper who controls the makeup of the school’s student body. A newspaper editor is a gatekeeper who decides which stories will be included in that day’s edition. Gatekeepers are critical to an institution’s security, quality, and overall success. A key member of the gatekeeping team is its cost estimator but, when they are provided with outdated and inaccurate methods of linking the company’s operating costs with the products, services, or customers whose potential value to the company is being evaluated, they may let in undesirable customers. In this podcast, Doug Hicks explores cost estimators as part of the gatekeeping team, and provides several examples of how flawed information leads to poor decisions. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
Finance is charged with being the ethical concience of their organizations helping to ensure adherence to company policies. Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML) and Blockchain have impacted how financial employees capture, analyze, and report finanical and non-financial data. In this episode, Raef Lawson discusses possible ethical risks. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
One major informational gap, from an internal decision support point of view, with typical financial accounting and reporting information is insight into intangible investments as they are typically lost in the operating budget and expenses. Today, the capital market value of companies across the market as a whole is 10 times their capital asset value. This is because of two primary factors: future expectations of growth and income, and the investment in capabilities and assets that are not on the balance sheet, that is intangible. Larry White explains why PACE thinks intangible investments merit much more attention and how this attention will support better internal decision making. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
PACE’s Profitability Analytics Framework is a strategic management framework that can be used by organizations to not only increase their profitability, but also to achieve their environmental, social, and governance (ESG) goals. In this podcast, Raef Lawson describes the components of the framework and how they help organizations focus on simultaneously achieving these diverse objectives. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
Finance is often primarily focused on cost management. Cost and revenue management are two sides of the same coin, yet accountants often fail in being familiar with both of these and how they can impact the organization's profitability. In this podcast, Raef Lawson explores how to work cross-functionally to be more involved in the revenue creation process and contribute to organizational value. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
In this podcast, Raef Lawson interviews Kip Krumwiede, former Director of Research at IMA and currently a business consultant. Kip shows how anything really can be measured and gives several examples relating to revenue modeling, cost modeling, investment management and making forecasts when our COVID world seems so uncertain. To make it actionable, Kip gives tips on ways to implement and improve profitability analytics without causing a lot of extra work and stress. Listen in on an enjoyable and worthwhile podcast! To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
A new role is opening up for accounting and finance professionals - that of analytics translator. This entails serving as a bridge between the technical expertise of data engineers and data scientists and the operational expertise of frontline managers. Serving in this role, accounting and finance professionals help harness the power of Big Data and create value for their organizations. This role will require learning new competencies in the areas of data storage and transformation, analytics and visualization programming, and movement of data. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
This podcast addresses the role of resource and activity information in improving organizational profitability. Analyzing and managing resources and activities, particularly from a traditional financial point of view, can be fraught with potential missteps. This podcast provides a simple, causal solution to analyzing and improving profitability across your organization. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
In order to exploit the digital transformation of business, finance professionals need to be able to effectively communicate the “story” in the data. Listen to this podcast to learn about the various types of visualizations and best practices. To learn more, visit the PACE website and follow our LinkedIn page and Twitter page.
When considering depreciation there are two perspectives to consider, financial and tax accounting (which is backward-looking) and managerial accounting (which is forward-looking). In this podcast, Doug Hicks discusses why depreciation measured by financial or tax accounting has no place in managerial costing and what can be used to be more realistic. To learn more, visit the PACE website and follow our LinkedIn page.
Advocates of modeling and decision support often tout financial accounting and reporting data as the "one version of the truth". In this podcast, Larry White discusses why this is not the case for decision support and how causality should be considered when "assigning" cost. To learn more, visit the PACE website and follow our LinkedIn page.
There are many principles, concepts and laws that apply to product and service pricing. In this podcast we discuss three laws that companies often violate or ignore. To learn more, visit the PACE website and follow our LinkedIn page.
Management accounting practices at most organizations are stuck in the 1960s. In this podcast, we discuss nine factors that have recently caused the interest in the adoption of better management accounting techniques to accelerate. To learn more, visit the PACE website and follow our LinkedIn page.
The accounting profession is facing challenges as disruptive technologies change its practices at an ever-increasing rate. Machine Learning and RPA (Robotic Process Automation) are eliminating the need for many entry-level accounting positions and some higher-level positions as well. In this episode, we examine the future role of the finance function and how accountants can remain relevant and become strategic business partners. To learn more, visit the PACEwebsite and follow ourLinkedIn page
To many people, management accounting is almost synonymous with cost accounting, yet management accounting can and should be, so much more. The role of management accountants is changing due to three main factors, changing expectations around the role management accountants should play, the rapid evolution of technology and data analytics, and the pressures placed on companies by the pandemic. In this podcast, we focus on how accounting education programs must better prepare their students to be ready for the needs of the profession. To learn more, visit the PACE website and follow our LinkedIn page