Decision accounting / Entscheidungsrechnung
Accounts that are prepared to help managers to take decisions are called decision accounts. It is of central importance for the quality of such decision accounts, that only those costs, revenues and volumes should be included that can really and directly be changed by the decision to be taken. It is therefore worth discovering which additional costs are incurred by any given decision, as well as those costs that are saved. Also, it is crucial to know what additional revenue comes in or how much revenue is lost as a consequence of the same decision. So it is always the differences from the initial situation that are relevant to decisions, i.e. revenue and cost amounts, which are changed precisely by that decision. Through an increase in sales additional revenue is generated, but also additional revenue deductions are incurred such as discounts, bonuses and commissions. With changes in volume, on the one hand, costs either increase or decline, while on the other hand the costs change as the structure of the business undergoes adjustments. When production or sales volumes change, more (or fewer) proportional costs are incurred, while, where structures are readjusted, blocks of structure costs are built up or dismantled. From this basic insight into cost behaviour we can draw an important conclusion: structure costs allocated by a key are never relevant for decision-making.