Throughput Accounting (TA) is eliyahu-goldratt's alternative to traditional cost accounting, built around three measures that align financial reporting with the logic of theory-of-constraints. The three measures are:
The goal is to increase T while simultaneously reducing I and OE. This contrasts sharply with cost-world thinking, which focuses on cutting costs everywhere. Goldratt argued that cost accounting, with its product cost allocations and overhead absorption, systematically misleads managers into decisions that hurt throughput in favor of apparent local savings.
The framework was implicit in the-goal but received its most rigorous treatment in the-haystack-syndrome (1990), where Goldratt argued that most management information systems generate data unsuited to the constraint-focused decisions TOC requires. TA provides the financial vocabulary for evaluating the impact of exploiting versus elevating a constraint and for comparing competing improvement options.
The paradigm distinction between T, I, and OE maps directly onto the throughput-world-vs-cost-world contrast. eli-schragenheim and others in the goldratt-institute community further developed TA into a practical alternative management accounting system, examined in detail in the toc-handbook.