[[Value flow]] is the process of converting inputs to outputs, adding value to raw materials to produce a finished product or service and provide it to the customer. Value flow what the income statement attempts to portray. Value flow represents the productive work the organization does. Relative to the human body, it is the work done by the muscles and skeletal system. %% # Brain dump - an income statement done on the accrual basis is attempting to track value flow: we report revenue on percent complete and defer revenue when the value hasn't yet been created - all about creating value to customers - accrual accounting supports this approach - creating value creates net resources that can be invested in create more value, and repeat customers and reference customers help keep the value flow going - Value flow is like the bones and skeletons that get the work done - Value flow is the [[Path]] and creating value equates to making progress on the path %% # See also - [[Value Chain]] - [[Value Creation System]]