People often refer to an enterprise system as a profit system. This is a great mistake. It is a profit and loss system, and the loss part, in my opinion, is more important than the profit part. The crucial difference is not in what ventures are undertaken. The crucial difference is in what ventures are continued and which ones are abandoned . . . The crucial requirement for maintaining growth and progress is that successful experiments be continued and unsuccessful experiments be terminated.
- Milton Friedman
While part of the efficiency of a price-coordinated economy comes from the fact that goods can simply "follow the money," without the producers really knowing just why people are buying one thing here and something else there and yet another thing during a different season. However, it is necessary for them to keep track not only of the money coming in from the customers, it is equally necessary to keep track of how much money is going out to those who supply raw materials, labor, parts, and other inputs. Keeping careful track of these numerous flows of money in and out can make the difference between profit and loss.