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Introducing Individual Chart to Accountants

D

D.Salman

#1
Dear Experts,
Good morning,
What are the effective approach that can be used to introduce X chart to accounting section to be used while monitoring revenues process.
one-day training , and 5-6 staff.
Many thanks
 

Stijloor

Staff member
Super Moderator
#2
There is quite a bit of information about Individuals Charts here at The Cove Forums. Have you considered Individuals-Moving Range Charts as a possible alternative?

Scroll down the page and you'll find some links to help you started.

Here is another link that may be helpful.

Stijloor.
 
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Steve Prevette

Deming Disciple
Staff member
Super Moderator
#4
I do think you have to deal with psychology here. Accountants generally don't believe in random variation. They believe they can measure costs down to the penny. Shifting to a control chart approach with dealing with budget and costs data will be an emotional event.

I do recommend using Dr. Deming's Red Bead Experiment to help. I haven't had the opportunity to use it with accountants, but I've had good luck the last few years with auditors. They seem to like it, and word of mouth is getting me invited to more and more auditing conferences to do the Beads.
 
C

Craig H.

#5
I do think you have to deal with psychology here. Accountants generally don't believe in random variation. They believe they can measure costs down to the penny. Shifting to a control chart approach with dealing with budget and costs data will be an emotional event.

I do recommend using Dr. Deming's Red Bead Experiment to help. I haven't had the opportunity to use it with accountants, but I've had good luck the last few years with auditors. They seem to like it, and word of mouth is getting me invited to more and more auditing conferences to do the Beads.
Steve, I am going to have to respectfully disagree with you here. A degreed accountant will have gone through a business school core. Every core set of business courses I have seen includes a class on business statistics. An accountant may not know what an XMR or X bar chart is, but they should understand what a normal distribution is, and be comfortable with mean and standard deviation.

BTW, my undergrad was in accounting. I do have trouble with a couple of the non-normal distributions, but I get through statistics OK, generally speaking.

:notme::)
 
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Caster

An Early Cover
Trusted
#8
Another thought...check out Steve's wicked excellent article "the life cycle of a trend"

Life Cycle of a Trend - An SPC Overview

For more check out the paper by Davis Balestracci

DEAD LINK REMOVED - But (Courtesy of Atul) http://davisdatasanity.com/

One can read his articles and newsletters. Also request a free copy of the preface and Chapter summary of Davis Balestracci's book.


Figure 4.1 on page 18 shows typical errors made interpreting accounting type data, and suggest how a control chart could help.

This could be excellent grist for your introductory session

If you can get financial types using charts, you will be at the head of the pack, good luck
 
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D

D.Salman

#9
Dear Experts,
Thanks for the information.
As Mr. Steve mentioned, some accountants don’t believe in random variation, but what if I show them an example of a stable and predicable process (revenue data), and telling them that this process is in control which means in the near future 99% from revenue are going to be between 110,000 and 200,000. Such information can be used for guidance and help.
I think this approach will make them little good.
Many thanks.
 

Helmut Jilling

Auditor / Consultant
#10
Dear Experts,
Thanks for the information.
As Mr. Steve mentioned, some accountants don’t believe in random variation, but what if I show them an example of a stable and predicable process (revenue data), and telling them that this process is in control which means in the near future 99% from revenue are going to be between 110,000 and 200,000. Such information can be used for guidance and help.
I think this approach will make them little good.
Many thanks.

Very few of them are going to understand you. Why do you want to do this?
 
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