Financial management used today has never solved financial management problems

Why do we have unsolvable financial management problems like intangible assets, unknown costs and value, distorted capital worth, un-managed investments and returns, and ill-informed corporate governance? The problems exist because we do not organize and manage the business and we do not organize and manage the capital utilized in the business. Financial management of cash and accruals does not provide accurate business financial management, and is separated from other tangible capital creating capital management problems.

R-pM manages financial and other capital as part of the business

The solution is Result-performance Management (R-pM) to organize the business and the capital utilized for 21^st Century Management. Financial facilities are part of facility capital that manages traditional tangible assets. Financial management is part of facility capital management to integrate and manage all facility financial and equipment assets, facility supply, and financial and non-financial facility records. R-pM eliminates unsolvable financial management problems and manages and reports all financial and other capital as part of actual business operation and development.

R-pM develops specific capital solutions, utilizes all solutions to produce value in results, and manages all investment returns

R-pM provides comprehensive facility capital management to manage all financial and non-financial reusable facility equipment, consumable facility supply, and facility record capital to produce value in results. R-pM manages all capital as part of the business to be developed and supported, and to be utilized in performance to produce output results of value. R-pm uses information technology to manage all capital solutions to know capital worth, development costs, un-amortized balance, performance costs, attributable result value-added, and return of the solution investment. [more...]

20^th century management contrives a chart of accounts and follows fixed principles to record the enterprise

20^th century management does not organize, manage, record, or govern the business. Organization and management structures, such as budgets and the chart of accounts, are laid over the business to manage the enterprise. Accounting posts arbitrary enterprise accounts set up in the account structure. The business continually changes, while accounts may be periodically updated when there is no account to charge. The focus of accounting is on following accounting principles, rather than recording the actual business to provide complete, consistent, and accurate business management records and reports.

21^st Century Management records the actual business for one set of complete, consistent, and accurate management information

Result-performance Management (R-pM) organizes the actual business for 21^st Century Management. R-pM records the entities that comprise the business in the capital investments made in the business to provide one set of performance solutions of known worth, the one set of economic output results of known value that must be produced for business success, and the performance of the solutions to incur costs to produce total result costs and known result value-added. The one current and one strategic business structure is used to plan and record the complete business. Results record income, performance records expenditures, and capital records solutions of positive capital worth as assets and solutions of negative capital worth as liabilities. R-pm uses the business itself to plan and control all financial and non-financial business transactions and status against business plans [more...]

Information systems gather corporate data that is irrelevant to the business

20^th century information systems do not capture business data or provide the information needed to manage the actual business. 20^th century information systems manage organization and management structures laid over the business. Management structures are arbitrary and define inconsistent data entities. Data on hundreds entities must be recorded throughout the corporation, and then processed and managed creating information complexity and providing mountains of confusing information.

R-pM organizes the business to capture actual business data

The objective of 21^st century management is to organize and manage the business of the corporation. Result-performance Management (R-pM) directly organizes and manages the business to record actual business data and report business management information that is not available today. Timely integrated information solutions are delivered to produce specific business and management results. The business is defined by three information entities and managed through six information sets.

Business management information is used to manage the business directly

R-pM provides actual business management information on the worth and return of capital investments, utilization of capital in performance to incur costs and produce results, and results of value produced by the business. Once actual business information is provided, corporate information provided by overlaid 20^th century structures becomes irrelevant and can be abolished. 21^st century management can then concentrate on managing the business [more...]

Enterprises today do not know costs or worth of all capital utilized

Enterprises may capture some known costs for some known capital items like fixed assets or employees. But many capital items and costs remain unknown. Development costs may be captured for some other big-ticket capital items. In this case, costs usually include costs for other undefined solutions developed in the same project. Capital worth may be assessed for some tangible items, but cannot be done for all capital to know actual enterprise net worth.

Capital costs and worth are an integral part of the business and actual business management

The enterprise business consists of output results produced, capital deployed to be utilized for the result, and performance in the utilization of capital to incur costs and produce value in results. When the business is managed, results value and quality are managed, capital worth and investment returns are managed, and performance costs and effectiveness contributing to result value-added are managed. Results and capital are managed in result-capital development to plan and manage the result value-added to cover capital development costs and provide the return on investment.

R-pM is the only way to capture capital and performance costs and assess capital worth

Result-performance Management (R-pM) is the only way to organize and manage the actual business. All capital is managed to eliminate intangible assets, unknown costs, unknown capital and enterprise business worth, and unknown return on investments. Human and other capital is managed to control costs, invest only in capital needed, develop capital to create value, and maintain and increase capital worth [more...]

Information is not managed as capital for support and utilization

Today’s enterprise captures information on a multitude of entities that describe structures laid over the business, but captures little information on the few entities that describe the actual business. The many enterprise information systems produce enormous amounts of information. However, little is managed as information capital to be used to operate, improve, and manage the business. Much information is managed by the wrong capabilities, such as management accounting and data management by IT. Most information just adds to the information complexity and overload problems.

The explosion in enterprise information demands new information simplification and management solutions

With emails, internet searches, file transfers, etc information is entering and leaving the enterprise at a high rate and enterprises have no way consolidate information or consistently reference information to the business. Additional structures are laid over the business to reconcile and classify information. Special information systems are needed to locate, extract, reconcile, and report information of use to management. Additional investments are being made in various document, record, report, content, etc management systems to manage information scattered around the enterprise.

This cannot solve the problem. The only way to solve the problem is the simplify and organize the business as a few specific data entities, and professionally manage all data, knowledge, records, and intelligence through reference to these few data entities.

R-pM organizes information capital for delivery and utilization by the business

Result-performance Management organizes the business to capture data and produce other information related directly to the business and to eliminate data collection and information reporting not related to the business. All information in, entering, or leaving the business is referenced to a result, performance solution, or other business entity. Management information is captured and reported on the business for decisions to add, change, or close output results or capital utilized as performance solutions

R-pM organizes information capital for professional support and development

Information capital requires specific capabilities to develop and maintain professionally. All information capital is categorized as business data, human knowledge, facility records, and management intelligence for professional maintenance of information and development of information solutions to produce business and management results [more...]

20^th century management uses many different structures for planning and management

20^th century management does not plan or manage the business. Various planning and management structures are laid over the business. Various strategy documents, corporate plans, budget structures, etc. plan the corporation in different ways. But, no corporation plans the actual business to show the specific result values to produce month by month to create the strategic value in the future business results.

20^th century management cannot support good corporate governance

20^th century management governs the corporation through rules and regulations because the business is not organized and cannot be planned and managed to create strategic value. Regulatory requirements continue to add overheads to the corporation make 20th century management even more difficult.

R-pM organizes, plans, manages, controls, and governs the actual business

R-pM replaces all 20^th century management structures laid over the business with one business structure used for all organization, planning, directing, control, and reporting. A strategic business structure sets the strategic result value to be created and the capital investments needed. Transparent business management and corporate governance manage the transition of the current business to the strategic business. 21^st Century Management conventions, definitions, and standards provide benchmarks and guidance for business results and performance and good governance [more...]

Accounting, today, does not maintain accurate business records

20^th century management does not organize or manage the business. This makes it impossible to keep records on output results of value produced by the business and the consumption of capital in costs to produce each result. Instead of recording the actual business, a chart of accounts is laid over the business to record income and expenses and the worth of certain known assets. 20^th century accounting records the cash generated and spent by the business, rather than recording the complete development and utilization of capital and the complete economic output results produced by the business.

Accounting, today, contains many unsolvable 20^th century problems

Accounting is one of the main unsolvable problems of 20^th century management. Accounting is separate from the actual business, records only a small sub-set of needed financial and non-financial business records, sees it role as control rather than capital management and business support, allows financial management problems such as intangible assets and unknown costs to persist, does not provide accurate business information needed for corporate management and governance, and on and on.

R-pM accurately records and accounts for the actual business for 21^st Century Management

21^st century management uses Result-performance Management (R-pM) to organize the actual business as one integrated business structure. The business structure replaces all organization, accounting, planning, performance, costing, reporting, and administration structures laid over the business. R-pM employs professional records management to manage facility records as capital, to maintain complete and accurate financial and non-financial records on the actual business, and to provide information performance solutions from records for good corporate management and governance. Records management is integrated within the business to be utilized to make decisions at all levels and to record accurately actual business decisions made [more...]

Knowing and managing costs has been a major management concern, since the beginning of business. We have faced two major problems in managing costs:

• We do not have one entity that incurs costs and includes all costs
• We do not have one entity that meaningfully absorbs costs for good management

Many methods have been contrived for costing and cost accounting. The methods try to gather "known" costs for separate entities like employees, fixed assets, cash, and supplies. The other capital utilized has never been defined or is labeled "intangible assets" with "unknown costs". All costs come from consumption of tangible and intangible capital. This is performance and all capital utilized must be organized and defined as one entity "performance solution".

Costing methods charge costs against contrived entities like center, station, activity, and product. Product is the only entity actually produced by the cost. However, many other outputs also are produced by costs. Products and other outputs produced by costs are part of one entity "result". The result is the entity that contains the value created by the costs and is the only entity that can absorb costs to show the value added by performance.

The only way to know all of our costs and to charge costs properly to manage value added is Result-performance Costing. By establishing result value-quality chains, we can know the cost and value of each result in the chain leading to the final product or service result that leaves the enterprise to produce our revenue and profit results. [more...]

20^th century management reports a wide range of information against the various organization and management structures laid over the business, producing business and information complexity. Since the actual business is not managed, actual business information is not captured. There is no framework to properly manage and support the body of information in the enterprise as capital. There is no framework to deliver information related to the actual business to the point needed to be utilized in the actual business.

R-pM organizes the business for 21^st Century Management. R-pM organizes information used in the business into four categories for professional development and support; business data to describe the entities that comprise the business, human knowledge to drive business performance to produce results. facility records to document results and performance and business transactions, and management intelligence to direct the business with management information against performance expectations and result goals. Each category has a precise and defined role in the business to cover complete information needs and to eliminate conflicting and duplicating information. Information is developed as specific performance solutions and integrated and delivered where needed to utilize other specific performance solutions and to produce specific business results [more...]

20^th century management does not manage capital. Certain capital is administered and other capital is neglected. Facility capital includes all reusable and consumable assets and business records. But, the stress is on administering financial capital at the expense of other capital of increasing importance and worth. Financial management and accounting have developed their own principles and practices that isolate financial management from the business and often conflict with the needs of general business management.

R-pM manages all financial and non-financial facility capital as one category containing three classes in facility equipment reused to produce a set of results, facility supply consumed in producing specific results, and facility records for complete documentation of the business in solutions utilized and results produced. This enables integrated planning of the solutions needed to produce results, integrated utilization of solutions that produce the specific result, and integrated record-keeping and record extracts as performance solutions to produce new results. [more...]