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Current Focus on Management Accounting

Briefy described below are some o the contemporary trends in managerialaccounting.

1. Impact on Organizational StructureThe controller is responsible or the control unction o The Vice President o Financeor the CF !the chie "nancial o#cer$. Ta%e a loo% at the con&ersation o a ather

and son during one o their bonding moments in a "ne dining restaurant.

'on( )*ad as the controller in the organi+ational structure, what normally are yourroles in the organi+ation- Are you under the Vice President o Finance.

*ad( )/reat 0uestion. 'imple, as you %now, 1 am part o the management team. 1normally e&aluate the alternati&e plans o the team, ormulate assumptions, ma%eorecasts or estimates and then gi&e my recommendations based on my "ndings. 1discuss these to the team. 2e do brainstorming in order to come up with theoptimal results and "nally prepare a "nal report to the Big Boss, the Board odirectors, or appro&al. 1 can only recommend but 1 cannot &ouch or theachie&ability o my report. My report3recommendations are supported withassumptions, estimates and orecasts. Also, as a controller or managementaccountant, 1 play a &ital role in the planning and control unctions o management.n the control unction side, my department maintains records and reports that are0ualitati&ely rele&ant. Finally, we aithully represent the "nancial condition,perormance, and cash fows o the organi+ation.

2. Focus on Customer)2hat is the basic purpose o mar%eting-'atisy customer needs'atis"ed customers 4 repeat sales and more salesMore sales 4 increase in pro"t

3. Cross-Functional TeamTeam e5ort, cooperation, empowerment, and moti&ation are &itally important in anyunderta%ing. 1n a corporation, all the unctional areas must be wor%ing towards onedirection in congruence with the ultimate goal o the company. All le&els omanagement wor% together, doing di5erent 6obs e#ciently and e5ecti&ely whileaspiring or one organi+ational goal.

4. Computer-Integrated ManufacturingC1M is a world7class manuacturing process that is ully 3 completely automated. 1tsmain ob6ecti&e is elimination o non7&alue added acti&ities. 1t also allows asterde&elopment o high70uality productions, shorter production cycle, reducedproduction costs and aster deli&ery time. The "gure shown below is a fowchartpresenting the relationships among the di5erent technologies employed in amanuacturing process.

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Current Focus on Management Accounting

. Time-!ased competitionManagers nowadays are &ery particular about the deli&ery cycle time, throughput

!manuacturing cycle$ time, and the manuacturing cycle time o their operations.8#cient and e5ecti&e adherence o these di5erent time7based strategies in theproduction and operations o an organi+ation will bring competiti&e ad&antages,customer satisaction, high 0uality products and ser&ice, and ultimately pro"t andstability or the company.

". #roduct life c$cle and %i&ersit$The product lie cycle has "&e stages( product de&elopment, introduction, growth,maturity, and decline. Because o the world7class manuacturing en&ironment,highly7automated manuacturing process, product lie cycle has become shorter. Tobe competiti&e, managers must %eep abreast o the ast changing technologies inthe mar%et place, both domestic and global, through continuous product inno&ation,

product de&elopment through research, and product di&ersi"cation in terms o lowcost, high &olume products and high cost, small &olume product lines. *o not stic%to one class o product lines. *i&ersity is the name o the game.

'. (lo!al competition

/lobal business platorm

Borderless economy

9:;< A'8A= 1ntegration

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Multinational corporations businesses around the globe

). Information Tec*nolog$ and Communication-Tec*nolog$ Management*oing business online. /etting what you need through the net. >ewlett7Pac%ard in>ilton !9::?$ states that, )The ace o change in technology is becoming muchaster and accounting and "nance people are &ery hea&y users o technology moreso than a lot o the other unctions

+. ,ust in Time In&entor$

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A production system that attempts to ac0uire components and produce in&entoryonly as needed, to minimi+e product deects, and to reduce cycle3setup times orac0uisition and production.Production is based on appro&ed customers@ sales orders. aw materialre0uirements are ordered rom suppliers to be deli&ered directly to the wor%stationsand then the "nished products are to be immediately shipped to customers.

1. Total ualit$ Management /TM01deally, ecellence is the goal o e&eryone. Companies are strategically aiming oran eample o '1 '1/MA !+ero deects perormance status$, or an 1' certi"cationso that they can satisactorily deli&er products or ser&ices to their customers.

11. Continuous Impro&ement /aizen costing0The control unction o business operations is not only to saeguard the company@sresources but also to determine the wea%ness o the perormance in order to initiateappropriate correcti&e measures. ne &ery good eample o %ai+en costing isbusiness process reengineering. /o or more. Continuously search or better waysin doing things.

COST M(MT S5STM1ncludes Acti&ity7based costing !ABC$, Acti&ity7based management !ABM$, 'tandardcosting, Dean production and E1T in&entory system are some o the recenttechnologies. Costs as discussed in your Cost Accounting sub6ect are resourcessacri"ced. Thus, eliminate losses brought about by non7&alue added acti&ities thatare not necessary.