What’s New in Management Accounting
Key innovations in management accounting include:
- Japanese management accounting;
- business re-engineering;
- activity-based costing;
- strategic management accounting;
- economic value-added approaches;
- accounting and ‘e’ business, and
- performance measurement and incentives.
The seven major trends in management accounting are:
- Expansion from product to channel and customer profitability analysis;
- Management accounting’s expanding role with enterprise performance management (EPM);
- The shift to predictive accounting;
- Business analytics embedded in EPM methods;
- Coexisting and improved management accounting methods;
- Managing information technology and shared services as a business; and
- The need for better skills and competency with behavioural cost management.
Management accounting will have to continue making significant changes to the way it operates within organizations. And, in order to keep up with the changes, new accounting models were created. Activity-based costing (ABC), for example, is one of the methods that have been developed as the answer to the changing needs. Activity-based management (ABM) is another example of a management accounting tool which are replacing the traditional accounting systems. ABM uses detailed economic analysis and increases the accuracy of cost information by more precisely linking overhead and other indirect costs to products or customer segments.
TheGAAP.net’s writers will elaborate on all the innovations and Trends in the coming weeks.
Please keep tuned in to read them.