Nt1330 Unit 4 Paper

363 Words2 Pages
In response to your request for some new long-term performance measurement advise, and after review your company’s performance and bookkeeping, I would like to propose the following initiatives to reduce management tendency to prioritize short-term results: 1. Measure a set of value drivers. It’s recommended the High tech add performance measures more future-oriented in addition to the accounting one. These supplementary value drivers will focus managers’ attention on actions and decision today in order to generate positive results in the future. To implement this option High Tech should determine first the right measure combination that wants to implement for each of the manager. I do recommend a combination of an Accounting measurement (as revenue, expense, margin, assets, and liabilities) with a non-financial measurement (quality, CSI, yield, etc.). This incentive structure must be added to each manager’s contract. For any of the non-financial measures there should be a reporting procedure / matrix than allow keeping track of it. It’s also important proper weight each…show more content…
Improve accounting measurements, to have a better matching of revenues and expenses and make accounting income more congruent with economic income. Through improving the accounting measurements, managers will be able to capitalize investments for R&D, employee development, and other categories of expense that have been made in order to generate cash (through savings or income) in future periods. In order to implement this option, there has to be a clear understanding of which measures are going to be affected (Capitalization of certain expenses, depreciation term of assets, etc.). For this matter, High Tech will need to prepare a different set of financial records for management control purposes, and will represent an additional cost due to processing, reporting, reconciliation, etc. We can certainly arrange for a meeting in the upcoming weeks, so we can review these options

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