"Milking the Cow"

A quick reflection from managerial accounting...

As I was reading my managerial accounting textbook (dorky, I know), I came across the phrase milking the cow. I had not heard this phrase used in this context. I mean milking the cow is the milking a cow... for milk. Right? In the context of managerial accounting, though, milking the cow has to do with managers focusing on short-run budgetary performance instead of long-run viability.

What does this look like?

This looks like trimming expenses where they can't be trimmed - particularly in repair and maintenance.

Sure, it makes good business sense to look for alternative suppliers or re-engineer a machine or process to reduce repair and maintenance.

But moving parts wear. Solutions need to be replaced. Wearable parts, um, they wear.

Unchecked milking of the cow can lead to disaster.

Why? You can only cut so far. Then, all of the sudden machines don't run when you need them to run. Then, you miss orders or your cost to produce goes up. Then, well, you get the picture.

It takes constant vigilance to avoid an untimely demise.