Throughput Accounting
Throughput Accounting is a management accounting methodology focused on optimizing a system's throughput—the rate at which a company generates money through sales—rather than traditional cost accounting metrics like efficiency or cost reduction. It is based on the Theory of Constraints, emphasizing identifying and managing bottlenecks to maximize overall profitability. This approach helps organizations make decisions that improve financial performance by prioritizing activities that increase throughput.
Developers should learn Throughput Accounting when working in product development, operations, or management roles to align technical decisions with business goals, such as in agile or DevOps environments where optimizing flow and reducing cycle times is critical. It is particularly useful for prioritizing features, managing resources, and improving system performance in software projects, as it shifts focus from local efficiencies to global outcomes that drive revenue.