Definition: Managers need to analyze and focus on many different aspects of their department or company in order to make sure each are running effectively and efficiently. It is easy for management to pay attention to parts of the business that are insignificant or parts that don’t need improvement. That is why managers use attention directing.
What Does Attention Directing Report Mean?
Attention directing is a managerial accounting report designed to help management focus on tasks that add value to the company. Traditionally a value-added activity refers to the companies supply chain or production process. Attention directing may examine value-adding activities like these.
It might also examine at activities that add value to the company as a whole. Community service and donations are examples of activities a company can do to add value to its image in the customers’ eyes.
Example
In management meeting, attention-directing reports can be used to focus management’s attention on topics and processes that need improvement to help the business grow and create more profit. For example, late shipping times might need to be improved. The intangible value of customer satisfaction is added when customers receive their shipments on time. Highly satisfied customers are more likely to return.
Attention directing reports go hand-in-hand with problem solving reports and scorekeeping cards. Both of these reports help management create goals and benchmark achievements. This way management can look at past performance, analyze the problems in prior years, and overcome them in the current year.
