We authenticate strategic resourced initiatives/costs (Committed) at all organisational structure levels using Business Research (Statistical Significance) and Business Analysis in a six-phase validation project.  

Business Research

• t tests
• Regression and correlation
• ANOVA
• Contingency tables and chi-square tests 

Business Analysis

INFORMATION TO CREATE VALUE

• CVP analysis
• Conventional and ABC systems
• Understanding non-financial performance measures (contemporary approach)
• Introduces activity-based management, value analysis, lifecycle management, target costing, ERP systems, EOQ, JIT, TQM and customer profitability analysis
• Introduces relevant information
• Recognises the nature of tactical, long term, special order, make or buy, add or delete, or further process type decisions

Information to manage resources

• Examines budgets
• Explains variance analysis and flexible budgets as control tools
• Understanding responsibility centres, transfer pricing and financial performance measures
• Evaluates investment centres
• Examines reward systems

Implementation

Implementing Non-FAA using the Six Phase Validation Process

Part 1: Initial Assessment and Review
Part 2: Implementation of stages 1 to 3

Implementation  Stage 1
1.    Accounting System  
2.    Organisational Characteristics    
3.    Value Chain

Implementation  Stage 2
4.    Pooling                        
5.    Activity Mapping

Implementation  Stage 3
6.    Inference / Validation 

Outcomes

Non-FAA prepares organisational performance reports (income statement and variance analysis) using operational information and then reconciles it to the traditional financial accounting reports. This leads to the following outcomes:

• Accurate cost and profit analysis at operational activity level
• Lead indicator estimating and ‘crystal ball’ forecasting
• Establishing value-added activity causality
• Identifying non-value-added activities
• Strategic alignment across TMTs and business units