What is the accounting restriction?
Limiting Accounting is a management accounting technique based on Eliyahu Goldratt restriction theory. This technique involves identifying restrictions that limits the company's production production. Removal of restrictions allows higher production production and lower individual costs of goods and services. Accounting of restrictions is also known as accounting of the permeability. When the company achieves increased permeability, more profit for reinvesting into the company is available and unnecessary expenses should be reduced through less restrictions.
Goldratt's theory of restrictions contains five basic principles. Identify the restriction, use the restrictions in a positive way, align the organization to support the decision on restrictions, if possible, interrupt the restrictions and focus on constant improvement. This process allows the company's management team to decide on the best approach to restrictions that will lead the production process. Under the limitation of accounting, Focus is often on financial restrictions within the company. Permeabilitymeans producing multiple goods or services with the same level of stock at hand. Improving the quality of the product and qualified work can often lead to less waste and better permeability. Lower investment should be made at fixed costs. Variable costs allow more money at the company's ticket offices, because capital is only spent when production occurs. All operating costs outside the production materials should also remain low.
When focusing on restrictions, companies should focus on people under their control. For example, the accounting of restrictions cannot provide information for lack of credit, purchase power, the threat of competitors or government regulation. All these factors are external and the company may not be easily repaired. Companies should try to eliminate restrictions in their own systems, which brake them from operation at maximum efficiency. The result should then be notJEZER DEFINE OR SERVICES TO GET THE OPINION TO EXTENS INTEREST.
Accounting of restrictions is not without its shortcomings. One mistake can spend too much time for administrative tasks in favor of really improving production processes. This results in potentially profitable ideas that never go to the actual phase of production.
The opposite of this defect is also possible. The company can completely rework its company and then remain satisfied with initial changes. The inertia can then be set because the company cannot continue to improve. This may result in the main overhaul later, which increases operating costs.