The Current Landscape

Management accounting’s regress from its golden era in the late 1800s and early 1900s is well documented; once the U.S. capital markets were established all accounting functions were subordinated to financial accounting. Today Management Accounting is expected to take G/L (General Ledger) dollars and parse them out into some semblance of operational metrics for measurement and management.

Each of the contemporary management accounting approaches proposes a different method to parsing the G/L. For example, traditional standard costing parses the G/L with a view towards product costing and external reporting, activity-based costing parses the G/L using activities, Lean Accounting to obtain a value stream view and the Theory of Constraints with the objective of obtaining throughput information.


What Makes RCA Unique

Resource Consumption Accounting (RCA) is a principle-based approach to management accounting and is not method centric. RCA is afforded this luxury through its value chain integration concept i.e., instead of dependence on the G/L, RCA establishes its cost model decentralized in the operational systems. The quantities and (their) values from source documents (e.g., goods receipts) are never separated as in traditional practice. RCA’s cost model comprises a model of operational quantities augmented by a layer of values. Value chain integration means RCA never needs to parse the G/L and is free to base its decision support information on principles appropriate to managers’ optimization endeavors – and not financial accounting rules. RCA is not just another three-letter acronym; it is indeed revolutionary in the sphere of management accounting. For more on the principles that underlie RCA and the concept of value chain integration refer to the library on this website.

People with a solid background in cost and profit management will find that RCA becomes an additional building block in their professional resume or portfolio. While the knowledge of concepts in other cost management approaches might be helpful to relate to or better understand the RCA tenets and concepts, they do not replace RCA Institute provided education. In fact - one will find throughout the familiarization with RCA a certain un-learning of contemporary concepts and a re-learning of traditional cost management teachings.

About Us

The Management Accounting profession currently lacks the ability to provide managers with relevant and comprehensive information for their decision-making roles. Numerous approaches and techniques serving different objectives, and subject to individual interpretations, lead to inconsistent and unreliable decision support information. Moreover, these approaches are based on contrasting principles and result in conflicting responses to managers’ questions.

The RCA Institute seeks to change that by raising the standard of management accounting knowledge and encouraging sound techniques and practices.

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