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Glossary (and soapbox)

Too often words are used as a barrier to enable specialists to pursue their
speciality without “undue” interference from line management. With this
in mind this glossary goes a little wider than the text and offers some addi-
tional food for thought for thoughtful businesspeople. It also gives me the
opportunity to reiterate those things that I believe are important for man-
agers, executives and directors to consider.

A

Above the line Marketers love talking of above-the-line and below-the-
line activities to confuse the unwary. Above the line is mass marketing –
such as advertising, below the line is addressed to individuals.
Accrual accounting The method usually used to record sales and
expenses. Sales and expense are recorded when earned or incurred rather
than when received or paid.
An example of the simple things that can be wrapped up in a fancy phrase
to befuddle the innocent. “Oh we use accrual accounting methodologies –
I wouldn’t expect a non-professional to understand.” A lifetime of dealing
with specialists of all kinds, but particularly finance people has taught me
to use the simple question, “Why don’t you try me?” A Nobel prize winner,
Leo Szilard, put it better when he said: “Why don’t you assume total igno-
rance and unlimited intelligence?”
Activity-based costing The key to effective costing of business activi-
ties is to separate those that add to customer delight and to regard such
costs as an investment. The old approach of allocating costs to products
tends to produce a product-centric rather than customer-centred approach

Glossary (and soapbox) 229