Part 2 of a series on cost management leadership

If you think your business is a leader in cost management, please email us at info@costmgmt.org and let us know the name of the business and why they are a cost management leader. We want to know what sets it apart.

What is Management Accounting?

First, ask what is Financial Accounting? If Financial Accounting consists of preparing financial statements, auditing financial statements, and tax accounting, then Management Accounting would be everything that is remaining. From our first article in this series:

‘What Do Cost Accountants Really Do?

1. Maintain proper inventory valuation – lead cycle counts and physical inventories; calculate reserves and lead efforts to reduce excess, obsolete, and slow-moving; fix any type of transaction or receipt errors.

2. In a standard cost system, set standards and perform variance analysis (costing).

3. Perform any type of analysis required by the business, often this involves reconciling sales and COGS or performing differential analysis.

4. Forensic accounting, tracing through the ERP system to perform causal analysis.

5. The ‘expert’ of the ERP system.’

To the above, for Management Accounting we can add:

• Budgeting,
• Forecasting,
• Capital Budgeting and Investment Analysis,
• Performance Management, and
• Revenue Recognition.

Next article in the series

TOTAL COST MANAGEMENT: Becoming A Cost Management Leader
Part 3 of a series on becoming a cost management leader

 

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