Implementation of Management Accounting
Automation of management accounting – transparency and order in a company
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Today, when the business environment is not that friendly, only owing the information will allow to avoid the loss of assets. For operational and strategic administration of the enterprise’s activities, the company’s management needs to have comprehensive idea of the business situation in the enterprise. A company’s future may depend on how promptly and accurately the information is presented.
The solution to this problem may be the implementation of management accounting system – operational system, that allows to collect, store, analyze, control and interpret various internal company’s data. All these processes are performed with the help of different accounting and report formation instruments.
Automation of management accounting allows to increase the effectiveness of company management due to the realization of such tasks as:
- Prompt collection of information important for the further operations of the company (inventory management, determination of price policy, cost management, analysis of profit sources etc.);
- Comprehensive analysis of this information (on the subject of the possibilities of growth and efficiency increase, optimization options etc.);
- Planning of the further company’s activities (formation of plans and forecasts, both long-term and short-term).
It is important to also note the differences in the way management accounting and its aims are considered in the West and in Russia.
In western policy, management accounting means working with indicators, the results of the enterprise’s activities in whole so as to optimize the company’s strategy.
In Russia, the key management accounting data (costs, profit etc.) are the elements of accounting system, that’s why the very notion of this type of accounting is also considered in this financial perspective.
The secrets of successful implementation and application of management accounting systems
- At the implementation stage
- Determine the necessary list of functions and aims of the management accounting system, and also the scale and the perspectives of its further usage.
- Conduct the detailed analysis of the company’s activities, and then form and describe the methodology and the structure of management accounting.
- Don’t limit yourself in engaging experts in the sphere of implementation of management accounting – elaborated methodological basis is a guarantee of the system’s viability.
- Accurately regulate the list of reports, that the management will need to make decisions in different spheres. Identify people, who will act as “consumers” of the information, collected within the management accounting framework, and adapt the reports according to their needs.
- Develop minimalistic analytical panels with key indicators for the top-management.
- At the exploitation stage
- Depending on the aims and tasks, identify the current and the perspective requirements to your management accounting system. Timely identification of the needs will give you time margin for the realization of new mechanisms.
- Due to the periodic change of the needs, perform regular (quarterly) testing of your accounting system to confirm, that it corresponds to the current requirements and provides the company’s management will all the necessary analytical information.
- Provide user training on how to work with the system immediately after its implementation.
Two useful pieces of advice from the experts in implementation of management accounting
While choosing the product, it is important to determine what element of management accounting is the first priority for the company’s management, what is it, that the system’s policy must be oriented towards. After that it will be easier for you to choose the most optimal system for your company. Engage a specialist with great competence in organization and implementation of management accounting automation systems.
Do not try to save money on acquiring and implementing a system of such a level: choose a system, that will correspond to the maximum list of all the tasks available for your company – it will allow to avoid further modifications and even implementation of a new system in a couple of years.
finance director, LLC "Orion International Euro"