Management Accounting

Management Accounting
This article is a bout the changing demands of the business world and the impact it will have on management accounting. According to this article the business role that management accountants play will be significantly different in the future. While this change is inevitable it is unclear how many of today?s accountants will be able or willing to adjust to the change and conform to what is being called ?New Accounting.?
Accountants in the future will have to play a much larger role in their organization. Becoming a change agent, someone who can help accelerate change in an organization. This is a problem for most accountants who are used to doing the same job year after year with little to no change. Since the introduction of the computer management has recognized that the PC can perform in much less time many of the tedious number crunching activities accountants spend hours doing. As a result of this accountants are being asked to do more and become analytical and proactive, looking into the future and joining with management in making and taking responsibility for all those tough decisions. Management expects the accounting department in addition to its role processing transactions to serve as the central information hub and purveyor of all sorts of data stored on the computers.

Accountants doing the same time that all these changes were happening due to PC were also facing change due to the new idea of ?reengineering.? This is the idea of going beyond seeking efficiencies and asking is this business process really necessary?. And if it is how can it be designed to better serve the business. If a task is unnecessary then the people who perform that task are as well which results in downsizing causing anxiety over job security. One of the first department to face reengineering was finance because much of its work deals with metrics, qualifying cost and impact of business processes. Top managers demanded studies of how well or how bad the metrics of their processes were before allowing reengineering consultants to redesign the organization. In the decade since reengineering was first employed the average cost of running a finance department has plummeted some 37% to 1.4% of an organizations total revenue from 2.2%. Further improvements are expected with the cost as low as 0.7% of total revenue from the current of 1.4%. This reduction means another one third reduction in the number of people in finance which will have a sizable impact on accountants.

If tomorrows accountants expect to be included in management decision making they will have to be the key personnel involved in developing, configuring, and dispensing information throughout the organization. Management accountants first priority should be to construct executive information systems so eventually line managers and others can tap into the data warehouse and easily and speedily extract the information they need to keep the business competitive.

So, in the future accountants will be expected to play the role of business partner and change agent. They must be prepared to become knowledge workers, always learning, setting up computer infrastructures so they can become the hub for data which will then be distributed as needed throughout the organization. If they cannot adapt to this change even if they are able to retain their jobs they will serve the purpose of nothing more than a high level clerk. Accountants can prepare for tomorrow by developing facilitation skills, thinking of themselves as knowledge professionals, getting used to not just looking at historical data, thinking outside the box and recognizing that change is inevitable.

I think everyone in an organization needs to view themselves as a change agent or knowledge worker. Change is constant as learning should be in order to stay competitive. With the introduction of the PC accountants need to step up and prove that their role is still necessary focusing not only on balancing the books but serving as a center of information for the organization. In the future I think that this is what management accounting will be all about. Crunching number is a job better left up to the computer systems. By integrating all the functions of the finance department, finance becomes a chief driver of the decision making process. Accountants in the future must be able to adapt to change, take risks, and do more thinking and analyzing than number crunching and reporting. The new role of management accountants as the data keeper for the entire organization makes them the backbone of today?s organizations which is a far larger job than balancing the books on time.

Management Accounting 7.6 of 10 on the basis of 926 Review.