Seminar on Accounting Management

Accounting for Time : Reengineering Business Process

To Improve Responsiveness
Tari Buana Dewi & Titin Nefia Lestari

We are from group 13th agree that using Accounting for Time in Reengineering
Business Process to Improve Responsiveness. Because, Time is one of performance
measurement identified by a balanced-score card approach to evaluate the company. Today's
competitive environment has forced many companies to reconsider their strategic goals and
plans. Instead of trying to compete only for a fee, many companies now consider the quality
and response as a key component of competition. Time has become an important element for
companies that try to compete in the global market. Many current management philosophies,
such as the Just In Time (JIT), are based on effective time management. The company adapts
this philosophy to their specialty products, managers and accountants need to recognize the
implications of the time based competition.

Time is an important element of competition passed for manufacturing and retailers.

When companies start competing on the basis of time however, their behaviour changes.
These changes affect all companies in the supply chain, including suppliers, manufactures,
distributors, and retailers.

To manage time effectively, the company needs to distinguish between the time that
contributes and that does not contribute. Contributing time adds value to the product. For
example, order entry function, material transformation, part assembly, product packaging,
and product delivery are all essential to the value of a product. Non contributing time at any
time in the total product lifecycle can be eliminated without compromising the value of the
product. That includes product timeout for the next value addition process to apply.

If a company wants to use financial data to help evaluate the time that it is not
contributing to be reduced or removed. So the company needs accurate information about the
activity that causes the noncontributing time and cost of the activity. In this case the company
requires ABC to identify the activities and costs of such products or services. Without ABC
the cost analysis of the reduction or elimination of activities will be limited due to
distortions/changes in costs that have been inherent to the traditional cost system. The use of
ABC is essential for building and using the value chain in order to specify the relationship
arrangement of value creation activities ranging from raw materials to the production process.