Throughput Accounting (TA) comes from the same stable of business thinking as the Theory of Constraints TOC and is a different way of accounting for a businesses success.  It is a major rethink on how to position your business for success.
See the Skills Module introduction: Theory of Constraints (TOC)   Blue Belt

It shines a different light onto such things as where to best invest your capital when you have several options to consider.

The definitions in TA are:

Under TA, if you have significant surplus capacity in the production system and can find a way to use it, it can make quite a dramatic impact on your bottom line because the cost of any machinery is accounted for under Investment and Salaried Labour is already covered under Overhead Costs so Net Profit goes up as Throughput rises but Operating Expenses and Investment remain unchanged so ROI goes up quite a bit.  With traditional accounting, there is no real focus brought to bear on productively using surplus capacity so it might go unnoticed. As you optimise your business, you will probably throw up surplus capacity so using it productively is a good and wise choice.

Later material to come will show a different approach to capital allocation. 



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