Top 7 Trends in Management Accounting

Author: Gary Cokins

Top Trends in Management Accounting Ultimately costing principles, such as the causality principle, must be converted into practical practices with supporting tools. This course 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 driver-based 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: May 2024

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
• The shift from historic to predictive accounting
• 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"
• Recognize how to 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
• Recognize 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

Level
Overview

Instructional Method
Self-Study

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
None

Advance Preparation
None