By sourcing, analysing and communicating the relevant financial and non-financial information, management accounting has the tools and techniques that are essential to watertight decision-making – and the long-term value that depends on them.
Management accounting adheres to and delivers the Global Management Accounting Principles across 14 core practice areas, covering all appropriate parts of your business.
By giving management accounting a framework to benchmark against, both in the business and in what happens beyond it, the 14 practice areas set high standards. They are as follows:
COST TRANSFORMATION AND MANAGEMENT
It sounds simple, but cutting waste enhances value generation. By identifying and reducing waste generation, finances can be freed up and diverted to areas of the business that will drive value generation.
This is defined by clarity of information. To predict future performance, management accounting provides a comprehensive view of financial and non-financial performance, business models, risks and strategy.
By closely scrutinising the organisation’s financial strategy, management accounting can identify opportunities for re-allocation of resources in the implementation of a robust, rewarding financial strategy that achieves agreed business objectives.
Through comprehensive documentation of an organisation’s policies, systems, processes and procedures for risk management, management accounting can maximise value generation within the established framework.
This practice area takes into account strategy, prioritising options, affordability and acceptable returns in assessing potential investments.
MANAGEMENT AND BUDGETARY CONTROL
From people and projects to sales volumes and revenues, management accounting controls performance against agreed targets, at all levels of the business.
PRICE, DISCOUNT AND PRODUCT DECISIONS
Management accounting works with the business in deciding the most business-beneficial products or services to provide, determining the selling price and potential discount structures.
Full integration of all aspects of a project means the project delivery team have everything they need, when they need it, to meet the project’s objectives on budget, on time – and to the required standard.
REGULATORY ADHERENCE AND COMPLIANCE
Management accounting ensures that all statutory and regulatory obligations are met. This prevents penalties, naturally; but more than that, it’s simply the good practice management accountants pride themselves on.
Organisational decision-making relies on proper, timely resource management. By aligning resources with strategic objectives, management accounting can help the business continually improve, efficiently and effectively.
This practice area takes internal and external factors into account, to identify, assess and respond to risks that arise from an organisation’s activities.
STRATEGIC TAX MANAGEMENT
By examining the role of tax in the financial analysis and decision-making processes, management accounting can proactively manage the organisation’s tax position, to meet legal and business requirements.
TREASURY AND CASH MANAGEMENT
Management accounting aids the handling of all financial matters, whether that’s generating funds internally, managing currency and interest rate risk, or simple fund and cash management.
While not strictly part of the management accounting function, this is included as a practice area because management accounting makes such a significant contribution to the parts of the business examined by an internal audit.