Discussion: Trends in Management Accounting

Please provide responses to the following discussion board post:

Discussion post 1:

EMP genuinely is a tool used to measure performance across all areas of the business in a steady, effective manner in order to deliver enhanced results. This involves reviewing how an organization not only performed in the past, but also, assessing if management has all the right information available to generate a valuable insight needed for an informed decision-making process in terms of predictive and future business planning.

Within recent times, EPM and its software-based platforms have evolved from Windows-based client/server systems to internet-enabled, web browser-based applications. Today, more organizations push for an increasing demand of cloud-based EPM software. The cloud eliminates the need for companies to purchase software and hardware or hire additional IT staff; thus, offering a more affordable alternative for EPM when it comes to lowering operational and capital cost and expenses. The removal of a costly infrastructure allows for resources to be invested in other parts of these organizations, and allows for employees to lay there focus in other key aspects within the organization as well.

Through their cloud-based software and applications, EPM efficiently links operational and business support functions with each other and helps to merge received information in the context of financial data. Mr. Gary Cokins is right when he states that most organizations implement all of their methods in isolation of each other from one sequence to the next instead of being integrated and embedded simultaneously. If organizations can implement all of their methods in a greater implemented manner, then business managers would be able to develop insight and spearhead performance improvements through themes such as target setting, integrated business plans, performance measurement and reporting, and analytics.

Each one of those themes would hit on key points and topics mainly supported by the continued popularity trend of shifting from historical accounting to predictive accounting. Predictive accounting operates mainly in the realm of financial and risk management accounting; feeding into the frenzy of the predictive analytics market which so many organizations have entered and operate in now. Through the use of predictive analytics, organizations empower their finance teams to enhance a variety of finance processes which provide information when it comes to predicting revenue, improving supply chains through identification of inefficiencies, analyzing loss drivers and other trouble spots where organizations are experiencing losses, and the possibility of identifying and detecting if internal and external financial fraud is occurring within the organization infrastructure.

Each of the mentioned points are critical when as Mr. Cokins stated savvy executives and decision-makers are wanting to know what is actually going to change through the use of predictive accounting. Identification of concerns within these areas would allow for those executives and business managers to make and execute key financial decisions for the good of the organization moving forward into the future, and not just focusing on the how much was made or lost in the past.

References

Kublashvili, A. (2019). Enterprise performance management (EPM) in a nutshell. Retrieved from https://medium.com

Institute of Management Accounting. (2014). 7 Trends in management accounting Trend 2. [Video File]. Retrieved from https://www.youtube.com

Institute of Management Accounting. (2014). 7 Trends in management accounting Trend 3. [Video File]. Retrieved from https://www.youtube.com

Oracle. (n.d.). How predictive analytics helps finance teams get ahead. Oracle. Retrieved from https://go.oracle.com

Discussion post 2:

Managerial accounting is different ways u can handle things within the organization from the business point of view. You can look at a lot of things from a lot of ways. The more you know about your business the better. (IMA, 2019) They just want a better understanding of their company.

Its good to know the most information as possible so when variables and shift costs change it would be good for the managers to know how these changes affects the company asap. (IMA,2019) We got to learn of the changes and do what it takes to dictate the profits like changing the price etc. to maximize the revenue.

References

Discussion post 3:

Both videos listed in this section cover topics that hit very close to home for me. While not specifically accounting specific, the ability to exercise synergy over multiple financial and HR programs within the military organization is a major problem that leaves customer solutions out of reach for much longer than necessary.

An action that may not be financial in nature, but that holds a financial consequence (second or third order effect), may not be immediately understood by the personnel technician; however, if the actions were interconnected, there may be more immediate warnings, suggested actions or communicated consequences relayed to customers at a much more advantageous time-frame than what they currently experience.

As for predictive accounting, budgeting costs for a fiscal year in my organization is not solely reliant on what we did or did not do the previous year(s). Changing an organization in any way may incur other costs not necessarily tied directly to the change being made. It is important to understand cause and effect, and apply that knowledge. “If this area is added, how will this effect the organization as a whole – and further, what will the impact of said change be on costs?”

While I may not be in a business style organization (in the traditional sense), we still have to operate on a budget based on projects and needs. While we don’t turn a profit, and then function off of said profit, we must still be consistently increasing our efficiency in a way to save money to allow for advances in other areas. Thinking 2 dimensional, one may decide to make a change in one department, and budget only the direct costs that change would incur. Thinking strategically, one may understand an indirect cost as a change in one area will inevitably affect another area.

I do not see these skills as easy to cultivate; however, I do believe them important if a business wishes to increase efficiency.

References

Additional information:

Listen to the following two videos in the IMA series:

Comment and expand on a topic discussed in the videos and provide a real world example from the news or your own experience.

Presence during both weeks of the module and a minimum of three postings are expected, one original posting and two responses to colleagues. Minimum required participation does not guarantee a perfect score.

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Discussion: Trends in Management Accounting

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