Price-Led Costing Replaces Cost Accounting
a major influence in pricing decisions. This may sound like the ultimate
apostasy coming from a former CPA and cost accountant, but like the ancient
mythological Greek Cassandra, I must speak the truth even if no one is pre-pared to believe.
One of the reasons cost accounting has gained such a strong foothold in
the pricing decisions of companies is that there is someone in charge of this
function, usually a cost accountant, estimating department, or the like. Today
it is common to find a chief pricing officer (CPO), director of pricing, yield
management group, or other such title, which is an enormous leap forward
for developing and diffusing strategic pricing skills. Finally, pricing is getting the promotion it has long deserved to an executive function, as companies around the world start to realize price is the major driver of profitability.
This is a very salutary trend, one bound to spread far and wide, helping to
make pricing a core competency in the intellectual capital company of
tomorrow.