Top Trends in Management Accounting Ultimately costing principles, such as the causality principle, must be converted into practical practices with supporting tools. This presentation examines how cost modeling has evolved over the last century. It will describe the trends and obstacles that have helped or delayed developments. These evolving areas and trends include:
• The expansion from product costing to include channel and customer profitability reporting and analysis.
• The integration of managerial accounting with other enterprise and corporate performance management (EPM/CPM) methods (e.g., the balanced scorecard, incentive compensation, risk management, supply chain management)
• The shift from historical reporting to predictive accounting (e.g., marginal / incremental costing; rolling financial forecasts, performance-based and driverbased budgeting, customer lifetime value [CLV] )
• Imbedding analytics into managerial accounting (e.g., correlation and segmentation analysis, recursive partitioning with decision trees)
• Acceptance of two or more co-existing managerial accounting methods
• Chargebacks to internal users and service level agreements of information technology (IT) and shared services.
• Recognition of barriers slowing the adoption rate of advanced managerial accounting (e.g., resistance to change, being held accountable, weak leadership) to gain buy-in.
Publication Date: November 2021
Designed For
CFOs, Financial officers and controllers, Managerial and cost accountants, Financial and business analysts, Budget managers, Strategic planners, Marketing and sales managers, Supply chain analysts Risk managers, CIO and information technology staff, and Board of Directors.
Topics Covered
- Eras of management accounting and cost model stages of maturity
- The expansion from product to channel and customer profitability analysis
- Integration of MA with EPM/CPM
- Imbedding analytics and digitization into MA and EPM/CPM
- Debates over costing methods (e.g., lean, TDABC)
- Managing IT as a business (chargebacks, SLAs)
- Recognition that "change management" is critical
- Why is the adoption rate so slow?
Learning Objectives
- Recognize how trends in management accounting practices have expanded accountants from "bean counters" to "bean growers"
- Calculate profit and loss statements for customers displaying profit margin layers
- Identify and differentiate strategic KPIs in a balanced scorecard and operational performance indicators (PIs) in dashboards
- Recognize how to perform "predictive accounting" for driver-based budgets / rolling financial forecasts, what-if analysis, and outsourcing decisions
- Differentiate how to embed statistics and analytics into product, channel, and customer profitability analysis
- Identify how to overcome implementation barriers such as behavioral resistance to change and fear of being held accountable
- Identify the process at the highest level on the predictive continuum
- Describe business analytics
- Identify an example of proactive analytics
- Identify which process is at the highest point on the intelligence hierarchy
Level
Overview
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Gary Cokins
Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina. Gary received a BS degree with honors in Industrial Engineering/Operations Research from Cornell University in 1971. He received his MBA from Northwestern University’s Kellogg School of Management in 1974.
Gary began his career as a strategic planner with FMC’s Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began his management consulting career first with Deloitte consulting, and then in 1988 with KPMG consulting. 1992 Gary headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 until 2012 Gary was in business development with SAS, a leading provider of enterprise performance management and business analytics and intelligence software.