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Current Focus on Management Accounting

Briefly described below are some of the contemporary trends in managerial


accounting.
1. Impact on Organizational Structure
The controller is responsible for the control function of The Vice President of Finance
or the CFO (the chief financial officer). Take a look at the conversation of a father
and son during one of their bonding moments in a fine dining restaurant.
Son: Dad as the controller in the organizational structure, what normally are your
roles in the organization? Are you under the Vice President of Finance.
Dad: Great question. Simple, as you know, I am part of the management team. I
normally evaluate the alternative plans of the team, formulate assumptions, make
forecasts or estimates and then give my recommendations based on my findings. I
discuss these to the team. We do brainstorming in order to come up with the
optimal results and finally prepare a final report to the Big Boss, the Board of
directors, for approval. I can only recommend but I cannot vouch for the
achievability of my report. My report/recommendations are supported with
assumptions, estimates and forecasts. Also, as a controller or management
accountant, I play a vital role in the planning and control functions of management.
On the control function side, my department maintains records and reports that are
qualitatively relevant. Finally, we faithfully represent the financial condition,
performance, and cash flows of the organization.
2. Focus on Customer
What is the basic purpose of marketing?
Satisfy customer needs
Satisfied customers = repeat sales and more sales
More sales = increase in profit
3. Cross-Functional Team
Team effort, cooperation, empowerment, and motivation are vitally important in any
undertaking. In a corporation, all the functional areas must be working towards one
direction in congruence with the ultimate goal of the company. All levels of
management work together, doing different jobs efficiently and effectively while
aspiring for one organizational goal.
4. Computer-Integrated Manufacturing
CIM is a world-class manufacturing process that is fully / completely automated. Its
main objective is elimination of non-value added activities. It also allows faster
development of high-quality productions, shorter production cycle, reduced
production costs and faster delivery time. The figure shown below is a flowchart
presenting the relationships among the different technologies employed in a
manufacturing process.

Current Focus on Management Accounting

5. Time-based competition
Managers nowadays are very particular about the delivery cycle time, throughput
(manufacturing cycle) time, and the manufacturing cycle time of their operations.
Efficient and effective adherence of these different time-based strategies in the
production and operations of an organization will bring competitive advantages,
customer satisfaction, high quality products and service, and ultimately profit and
stability for the company.
6. Product life cycle and Diversity
The product life cycle has five stages: product development, introduction, growth,
maturity, and decline. Because of the world-class manufacturing environment,
highly-automated manufacturing process, product life cycle has become shorter. To
be competitive, managers must keep abreast of the fast changing technologies in
the market place, both domestic and global, through continuous product innovation,
product development through research, and product diversification in terms of low
cost, high volume products and high cost, small volume product lines. Do not stick
to one class of product lines. Diversity is the name of the game.
7. Global competition
Global business platform
Borderless economy
2015 ASEAN Integration
WTO
Multinational corporations businesses around the globe
8. Information Technology and Communication-Technology Management
Doing business online. Getting what you need through the net. Hewlett-Packard in
Hilton (2007) states that, The face of change in technology is becoming much
faster and accounting and finance people are very heavy users of technology more
so than a lot of the other functions
9. Just in Time Inventory

Current Focus on Management Accounting


A production system that attempts to acquire components and produce inventory
only as needed, to minimize product defects, and to reduce cycle/setup times for
acquisition and production.
Production is based on approved customers sales orders. Raw material
requirements are ordered from suppliers to be delivered directly to the workstations
and then the finished products are to be immediately shipped to customers.
10.
Total Quality Management (TQM)
Ideally, excellence is the goal of everyone. Companies are strategically aiming for
an example of SIX SIGMA (zero defects performance status), or an ISO certification
so that they can satisfactorily deliver products or services to their customers.
11.
Continuous Improvement (kaizen costing)
The control function of business operations is not only to safeguard the companys
resources but also to determine the weakness of the performance in order to initiate
appropriate corrective measures. One very good example of kaizen costing is
business process reengineering. Go for more. Continuously search for better ways
in doing things.
COST MANAGEMENT SYSTEM
Includes Activity-based costing (ABC), Activity-based management (ABM), Standard
costing, Lean production and JIT inventory system are some of the recent
technologies. Costs as discussed in your Cost Accounting subject are resources
sacrificed. Thus, eliminate losses brought about by non-value added activities that
are not necessary.

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