Throughput Accounting by Thomas Corbett describes how to make decisions and measure improvements from the Theory of Constraints mindset.

P3CG recommendation: Throughput Accounting is an essential resource for those who wish to better understand how to utilize throughput accounting to make better day to day decisions on truly improving profitability.

Publisher’s description:

Learn How To Apply The Theory Of Constraints To Management Accounting.

The Theory of Constraints, a management philosophy derived from physics, assumes that constraints prevent organizations from achieving better performance. The Theory of Constraints (TOC) is based on a scientific method that has been developed and refined for nearly three decades by Dr. Eliyahu M. Goldratt. As a tool for business management, TOC is now accepted as a mainstream alternative to cost accounting.

Throughput Accounting

• Reveals a new management tool for managerial accounting and shows an alternative path for other management practices.
• Enables managers to quickly see if their decisions increase profitability.
• Demonstrates some of cost accounting’s flaws, and shows how these errors will lead to bad decision making.
• Compares the paradigm of TOC-based throughput accounting with more conventional cost accounting methodologies and in the process, demonstrates a new way to solve the complex problems of modern management.

Tags: measures, Thomas Corbett, throughput accounting