Accounting For Service Science
The accounting profession creates value in 3 ways. The most evident way it creates value is through financial reports. The internal and external procedures required for these reports add credibility to management assertions. The second way accounting creates value is by turning financial data into information that managers rely upon to make decisions. Accountants create value in a third way by identification and valuation of assets which they then track to protect stockholder collateral. These roles manifest themselves in many routine ways. However routine those accounting systems and procedures may seem that are costly. The investment for design and implementation of new systems is hard to obtain from general management and so there is a great deal of resistance whenever change is proposed. Some of the established systems and procedures of the accounting discipline may not be favorable towards the implementation of a service science perspective. Still, accounting research does consider the special circumstances of service
VB+Access图书管理系统 organizations. However a service science scholar will have to address some problems in parallel with the accounting research to overcome systematic barriers to implementation of their ideas. In order to identify potential areas of unfavorable treatment a basic review was conducted. Two well respected and current management accounting textbooks were selected. These books were reviewed for references to service environments or areas of investment emphasized in the service science literature that was reviewed earlier in this paper (Eldenburg & Wolcott, 2005)(Garrison, Noreen, & Brewer, 2008). Five areas of accounting practice appear to present an obstacle to those wanting to succeed by strategically embracing service science based on this rudimentary review. The following sub-sections offer a prospective explanation of areas that merit deeper cross disciplinary examination.
Capital Budgeting
Budgeting cycles of all organizations follow a predictable pattern. Through strategic and other negotiations a sales budget is established. The sales budget becomes the key determinant for production and administrative budgets. This establishes the income statement expectations for the year. The related operating budgets then provide the basis of balance sheet considerations. That consideration includes investments in long lasting assets and changes to the capital structure of the organization. Capital budgeting has a long-term focus and comes with a set of procedures that are worth considering in the context of service science. Service science calls for investment into intangible items that help the provider and their customer co-produce value. A firm embracing this model will tend to make more investments in personnel and work processes than a traditional, production oriented firm. Intangible investments like this will not go onto the balance sheet. Investments must meet strict rules of capacity creation and objective valuation before an accountant can include them on the balance sheet. This means that managers implementing a service science approach will initially have to seek larger operating budgets than their counterparts using a more traditional approach because many of these “investments” will not be recorded as capital items. Over a number of quarters or years it will take for the investment approach to yield higher pricing, volumes, or both the quarterly income of the firm will be depressed by this accounting approach. Some aspects of the service science model stress the importance of the service environment and service technology. These items will usually go onto the balance sheet because their value is objectively determined and use over future periods is ascertainable. The financial perspective on such assets, influenced heavily by tax considerations, is that these本文来自辣.文,论^文·网原文请找腾讯752018766 depreciate rapidly. Proposals for these investments must compete with all capital investment proposals for the limited resources of the firm. Faced with relatively higher depreciation rates in the early years such investments face a higher hurdle for funding. An advocate of a service science approach will have to be more skilled that an traditional manager in constructing the numbers to even up the field. The capital budgeting challenge is exasperated by an additional challenge—the status quo. Returns from capital investments are normally determined in comparison to the existing methods of doing business. Such an approach will work against the service science advocate. It is clear that once one firm invests to increase their value creation potential that status quo for others in the same market has changed. Capital budget proposals often neglect this
VB学生信息管理系统 - consideration and thereby contribute to tendency of firms with highly developed accounting systems to resist new paradigms until others have changed the status quo. Advocates of service science methodologies will have to consider closely how to overcome the systemic capital budgeting bias against the classes of assets their discipline is featuring. Service science research can collaborate with accounting to explore ways to gain “useful” valuations.
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