Top 7 trends in management accounting

Article Review
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Identification article
In the business world today, gaining a competitive advantage in the market allows a business to grow by attracting many clients and investors. Managing any organization’s accounting has been a challenge among many managers who have opted for multiple strategies to have a competitive edge in the market. Notably, accounting managers are quite hesitant about implementing new programs since they do not last. The research paper is going to focus the accounting management trends over the years and their relevance. They include; expansion and increase in profitability, management accounting  EPM, shifting to predictive accounting, business analytics, improved accounting approaches, managing information, and better accounting management skills. The article, referred to as the current trends in managing to account, has discussed the seven strategies a company can adopt in the organization culture, by the author Gary Coins, Published in April 2013.
Target audience
The research paper mainly targets the accounting managers in organizations, which is vital in maximizing profitability. The article also targets the accounting professions to understand the costing principles and how they can be implemented. The article examines how accounting principles have changed over the decades and how organizations can deploy them.
Summary
The article has comprehensively examined some of the managing accounting strategies that are on the trend. It is every business wish to maximize productivity, which will alternatively increase profitability. Implementing the ABC approach has become quite common to many businesses today; the ABC allows the businesses to track down every resource’s costs and drivers. Unfortunately, many business enterprises are stuck using the traditional shred expense and indirect costing method. In the past, businesses adapted the product and service standards and then incented them to sell them to the available customers. However, most of these products and services are integrated with one line making it easier for competitors to copy its services and products. Nevertheless, to mitigate the risk of losing the competitive advantage, a company must differentiate the products, services, and customers segment to be the main competitive edge.
The second approach entails managing the accounting and increasing the role of the EPM by integrating approaches such as maps, balanced scorecards, strategy maps, among others, to facilitate effective control, maximize profits and improve the team’s strategy. The main goal of this approach is that it embeds business analytics such as correlation and segmentation analysis. Therefore, it is important to have effective output management, which allows a better insight into all the activities and the operations in a company. One key aspect in managing to account is the implementation, which documented me the strategy map becoming the key indicators of all the business operations. The third trend entails adapting the predictive accounting since reports indicate an overwhelming gap between the accounting managers’ report and the employee expectations. However, over the last decades, accountants have developed better strategies to improve the utility and the accuracy of costs by adopting the ABC method. The gap between the employees and the accountant’s reports has reduced significantly due to the cost drivers’ accuracy, making it easier to predict the future cost. The fourth trend involves integrating the business analytics with the EPM method, which has become the only strategy in maintaining the competitive edge. While this is not an easy task for managers, it has proven to be an important tool for discovery and investigation. Analytics simulates further questions and allows for these answers, such as learning growth, innovation strategies, enhancing customer satisfaction, and increasing employee and customer loyalty. Analytical supports accounting in multiple ways, such as expenses and sales. It also recognizes the progress in the accounting activities, which alternatives increase competency.
The fifth trend comprises adapting the current and more improves accounting strategies such as the existing costing method. Some advocates against the ABC have argued that adapting it is more costly and complex than the visible cost drivers. This trend aims to answer and analyze the truth in adapting the costing method and the best approach. Different organizational managers and employees deploy different costing methods for different reasons. For instance, operational managers use lean accounting if they want to increase profitability and remove waste.
However, the ABC method provides a better understanding due to its accuracy and accountability. The sixth trend involves managing the information shared in business. The information can be used to effectively transfer costs based on the rate of consumption aligning with SLAs. Most of the service and manufacturing industries apply IT services in reporting the cost management system. Lastly, the accounting manager can adopt the progressive method by improving its behavioral change to succeed. An organization ought to train its employees, especially in accounting management, by specialists.
Findings
Based on the article, all the suggested trends will only be accurate and effective if they adapt the ABC method. It has several advantages; it reduces costs by providing accurate and precise information regarding the accounting information. The accounting management is more will be in a better position to make sound decisions due to the knowledge of the nature of activities. The ABC method indicates the inefficient processes and a better justification of the manufacturing overheads.
It also determines the profit margin more accurately and indicating the wasted costs. However, it has several disadvantages in managing to account, such as it is time-consuming, it is costly to analyze the full data, sometimes the accounting data is not readily available, sometimes the results do not conform to the accounting principles, and the fact it is not always efficient for small companies.
Personal synopsis
From the articles, every organization must find an influential culture that supports innovation and induces the employees to adopt the ABC method. The ABC method can trace the direct labor of products and services and accurately allocate the overhead based on the labor hours. The article has critically examined the trends in managing to account for businesses. However, very few have adopted the seven strategies. For all the trends to be successful, businesses need to be up to date with the current technologies to be efficient. One of the biggest drawbacks for organizations is that they are using traditional methods. Other barriers include the company’s social and cultural status, whereby people can be resistant (Cokins, 2013).
 
 
Works cited
Cokins, G. (2013). Top 7 trends in management accounting. Strategic Finance, 95(6), 21-30.
 
 
 

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