Trends in Management Accounting
The Institute of Management Accountants (IMA) has a series of YouTube Videos on Trends in Management Accounting. We will continue to review and discuss some of these trends to learn about developments in this field for discussions in this course.
Listen to the following two videos in the IMA series:
Comment and expand on a topic discussed in the videos and provide a real world example from the news or your own experience.
Presence during both weeks of the module and a minimum of three postings are expected, one original posting and two responses to colleagues. Minimum required participation does not guarantee a perfect score.
ALL RIGHTS RESERVED CONTENT
7 Trends in Management Accounting â€“ Trend 2. Authored by: IMA. Located at: https://youtu.be/qcbpjkRgW9I. License: All Rights Reserved. License Terms: Standard YouTube License
7 Trends in Management Accounting â€“ Trend 3. Authored by: IMA. Located at: https://youtu.be/3cwdelVpNRA. License: All Rights Reserved. License Terms: Standard YouTube License
- In watching the videos for this discussion and others alike, my takeaways on this subject is that the accountability is very important. The trends that are being discussed are shifting the way management and accountability is being focused around and its operational movement in real time. According to AccountingInFocus.com. (2018), â€œFinancial accounting is all about historical information. In the financial statements, we are reporting things that have already happened.â€ Administration bookkeeping or managerial accounting is the way toward distinguishing, dissecting, recording and introducing monetary data that is utilized internally by members of management in any organization for basic leadership, business planning, managerial decision making and financial control of departments in cohesive alignment. According to AccountingInFocus.com. (2018), â€œ since managerial accounting deals mainly with planning and decision making, we are looking into the future and trying to predict what will happen based on historical trends.â€ The trends include channel and customer profitability reporting, integration of enterprise performance management methods (e.g., strategy maps, balanced scorecard), driver-based rolling financial forecasts, applying analytics, and co-existing methods (e.g. lean accounting). Accounting professionals need mastery with these. Ultimately costing principles, such as the causality principle, must be converted into practical practices with supporting tools. In discussions, an organization examines how cost modeling has evolved. It further evaluates trends and obstacles that have helped or delayed developments. Finance and accounting professional are typically considered to be very quantitative. They are by nature number crunchers. But collecting, validating, and reporting data is not the same thing as analyzing the information that can be gleaned from data. From a personal professional experience, working in the pharmaceutical industry and a part of my leadership staff, one of the things that we have to look at on a daily basis is our occupancy and the cost of keeping staff based on forecasted numbers and the real time allowance relating to the cost of having a greater number of personal available when the calls are not the to support that. The movement from product/service centric to a consumer module, in or world the consumer obsession, this shift more focuses on the NPS of the customer more so that the monetary association give the greater reward, business wise and financially in the end.ReferencesAccountingInFocus.com. (2018). What is managerial accounting? Retrieved from http://accountinginfocus.com/managerial-accounting-2/introduction-managerial-accounting-2/what-is-managerial-accounting/McLaughlin, M. (2014, February 11). Retrieved from https://www.youtube.com/watch?v=KCyg8-zM9bATaylor, M. (2014, November 20). Retrieved from https://www.youtube.com/watch?v=T_H72rQXUdAless0Unread0Replies5Views
posted Jul 30, 2018 10:32 AMIn the video (trend 3) Gary Cokins discusses one of the seven major management accounting trends which were predictive accounting. Predictive accounting projects forthcoming financial performance of a business by using a statistical understanding of their process. The objective of predictive accounting is to understand the future and itâ€™s created on the observation that much of a businessâ€™s work is repeatable. To understand predictive accounting process maps are used for the sequence of activities. Once a business gets awareness the mapping process begins; the how, when, and why the events occurred. An example of predictive accounting is: warning clients in advance about working capital being tied up in debtors and inventory, flagging abnormal transactions or doubtful debts owing to seasonality (Acuity Magazine, 2017). A business can receive different benefits from using predictive accounting. Those benefits will allow an organization strength against their competition. Predictive accounting will produce an effective relationship between the business and the client.ReferencesAcuity Magazine. (2017, December 6). Tools and techniques of the predictive practice. Retrieved fromhttps://www.acuitymag.com/finance/tools-and-techniques-of-the-predictive-practiceBrimson, J. (n.d.). Predictive Accounting Article. Retrieved from http://www.valuecreationgroup.com/predictive_accounting_article.htmInstitute of Management Accountants. (2014, March 13). 7 Trends in Management Accounting – Trend 2 [Video file]. Retrieved fromhttps://youtu.be/qcbpjkRgW9IInstitute of Management Accountants. (2014, March 20). 7 Trends in Management Accounting – Trend 3 [Video file]. Retrieved fromhttps://youtu.be/3cwdelVpNRAless0Unread0Replies2Views
In my organization, we are involved with Department of Defense acquisition process. As Air Force demands for weapon capabilities change, defense contractors will implement predictive accounting practices, such as Target Costing, to determine cost-effective solutions to deliver required capabilities to the user. For example, when there is a demand for a capability, existing assets are evaluated to see if they can fulfill the capability requirement sufficiently. If an existing asset doesn’t exist, requirements are formalized and eventually bids between contractors begins. Before and during this time, defense contractors will place bids, based on Target Costing strategies such as determining customer requirements, evaluating competition, and establishing acceptable profit margin (Brimson, 2001). In order to place a competitive contract bid, defense contractors must predict if they can deliver customer requirements at an acceptable cost, while being competitive with opposing defense contractors. Christian
Brimson, J. (Using Predictive Accounting to Improve Product Management. International Journal of Strategic Cost Management, 2(3). Retrieved from:
Rubric Name: MBA/MSHRM/MSL Discussion Grading Rubric – Timeliness v1
Initial posting reveals a clear understanding of all aspects of the threaded discussion question; uses factual and relevant information; and demonstrates full development of concepts.
Initial posting demonstrates legitimate reflection and answers most aspects of the threaded discussion question; full development of concepts is not evidenced.
Initial posting demonstrates some reflection and answers some aspects of the threaded discussion question; Limited development of concepts is evident.
Initial posting was not on topic; the response was unrelated to threaded discussion question; and post demonstrated only superficial thought and poor preparation.
Responded to the required number of students and to the professor, if appropriate, for every discussion. Demonstrated analysis of othersâ€™ posts; extends meaningful discussions by building on previous peer posts and offering alternative perspectives.
Responded to almost all of the required students and to the professor, if appropriate, for every discussion. Provided comments and new information to other posts; not all responses promote further discussion of the topic.
Responded to some students and to the professor, if appropriate, for every discussion. Little depth in response; agreed or acknowledged one other classmateâ€™s initial posting.
Did not respond to any student or the professor.
Refers to and properly cites either course and/or outside readings in both initial posting and responses to peers.
Refers to and properly cites course and/or outside reading in initial posting only.
Makes some reference to assigned readings with some citations or cites questionable sources.
Makes no reference to assigned readings without citations or cites questionable sources.
Demonstrates mastery conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are logically presented with appropriate rationale.
Demonstrates considerable proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are presented with necessary rationale.
Demonstrates partial proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are somewhat consistent with the analysis and findings.
Demonstrates limited or poor proficiency conceptualizing the problem; viewpoints and assumptions of experts are analyzed, synthesized, and evaluated; and conclusions are either absent or poorly conceived and supported.
Initial post occurs in a timely manner (1 â€“ 3 days into module) allowing ample time for classmates to respond and engage.
Initial post occurs later (4 â€“ 5 days into module) allowing limited time for classmates to respond and engage.
Initial post occurs substantially late (6-7 days into module) allowing minimal to no time for classmates to respond and engage.
Initial post occurs after the first week of the module.