A question for the other members of this group that are involved in financial planning & analysis (FP&A) - to what extent do you question/understand the methodologies behind the data you use in your modeling? I'm thinking specifically of costing data, which for most companies is based on standard costing, although other costing methodologies (such as ABC) could be better for forecasting, analysis and internal decision support.
Is selection of costing methodology an issue that ever comes up? How does your current methodology affect the accuracy of your analysis? Or maybe it's not possible to tell?
Raef ... Allow me to begin by writing that activity-based costing information is a pre-requisite for any decision-making support. (1) For past fiscal periods it is primarily "strategic" for profit margin analysis of products, standard service lines, distribution channels and customers. It is "operational" for process management (e.g., lean accounting for value streams, cost of quality [COQ] for quality management. (2) For future fiscal periods it also "strategic" for driver-based budgeting and rolling financial forecasts. This is because one needs unit-level cost consumption rates (calculated and calibrated from past period ABC) to multiply times the forecast unit sales and mix volume to calculate the required capacity (e.g., number and type of employees and their salaries and wages; expenses spend with suppliers).
To now answer your questions, "selecting the methodology for modeling" is critical. With a poor methodology it is "garbage-in and garbage-out".