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Management Accounting Course

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21st Century Management Accounting (3 days)

Course Details

Code:8500
Select a start date for more details
18 Nov - 20 Nov 2019
Miami
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Introduction

"The instructor was unfailingly cheerful, energetic, enthusiastic and professional. In fact, the enthusiasm he put into his teaching made for a highly informative and enjoyable course. It’s up to me now to find ways to adapt his ideas to my organization."

In the 21st Century’s highly-competitive, global business world, finance and accounting professional are increasingly being pressured to move beyond the tasks of reporting their company’s results and protecting its assets and assuming the roles of trusted business advisor and enabler of their company’s strategies and plans. They are, in effect, being asked to expand their horizon from the science of counting beans to the craft of growing them.

In response to these demands, the management accounting marketplace has become cluttered with a plethora of concepts and tools all of which claim to be the ultimate solution to the financial professional’s problem. Included in the menu of “best ideas ever” are Activity-Based Costing and Management, Theory of Constraints, Lean Accounting, the Beyond Budgeting movement, Resource Consumption Accounting, Target Costing, Balanced Scorecards, Time-Driven Activity-Based Costing, and the German practice of Grenzplankostenrechnung. All have advocates who would have you believe that by adopting their philosophy and/or implementing their software, all of your company’s management accounting needs will be fulfilled.

Management accounting is, however, much more than just costing, budgeting, scheduling, forecasting, or performance measurement practices. It is a process that requires partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy. Items from the clutter of popular concepts and tools may have a role in that process, but the process is much more than accurate costing and sophisticated scorecards.

This wide-ranging three-day overview is designed to provide attendees with a comprehensive view of the management accounting process; a view that serves as the backbone for crafting the sophisticated management account concepts and tools available to today’s accountant into a management accounting process that will serve as a powerful, value-adding tool for their organization.

This course answers questions such as:

  • What are the key component parts of an effective management accounting process?
  • How can an organization insure that its cost model represents the fundamental economics that underlie its business?
  • Why is the ability to predict costs just as important as the ability to assign them?
  • What should be management accountants’ objective; accuracy and relevance or precision?
  • What kind of modifications must be made to costs recorded under financial accounting standards to make them more representative of the true, long-term, sustainable economics of the organization?
  • How can management accounting information be used to help management craft a successful business strategy?
  • How can a group of performance measures be selected and assembled that will direct employees toward the implementation of management’s strategy.
  • How can management accounting information be used to enhance the quality of pricing, investment, process improvement, sourcing, and other critical management decisions?

Learning Objectives

  • Understand the entire taxonomy of management accounting and how powerful 21st concepts and tools can be incorporated into an effective management accounting process
  • Learn how to design a predictive cost model that reflects economic reality
  • Appreciate the distortions inherent in using costs as measured by financial accounting standards and how to avoid them
  • Learn how to incorporate the cost of capital into cost information used to support management decisions
  • Understand how to turn a forecast into a plan through the use of strategy maps
  • Appreciate the importance of developing measurements that support the execution of the organization’s strategy
  • Learn how accurate and relevant cost information can be used to improve decisions and enhance profitability
  • Understand how to turn accounting from an “overhead” function into a value-adding management accounting process

Topics

  • The taxonomy of management accounting
  • The building blocks of effective management accounting
    • Structurally valid cost models
    • Accurate economic – not just accounting – cost information
    • Accurate, but not necessarily precise, operational data
    • Strategies that compliment strengths, weaknesses and profit zones
    • Strategy maps that translate strategy into action
    • Performance measures that encourage and track the implementation of strategy
    • Formal decision making systems that effectively use management accounting information to enhance the quality of decisons
  • Structurally valid cost models
    • The importance of models in decision making
    • Oxenfeldt’s rule
    • The causality principle
    • Designing cost models that match economic reality
    • Designing cost models that both assign and predict costs
    • Special costing tools and techniques
    • Identifying cost drivers and assignment divisors
  • Data accuracy and relevance
    • Precision vs. accuracy
    • Financial costs vs. economic costs
    • The periodicity problem
    • Depreciation expense vs. long-term capital preservation
    • Cost of capital
    • Cost behavior – the danger of thinking “fixed” vs. “variable”
    • Measuring cost drivers and divisors
    • Time measures
    • Event and transaction measures – weighted and unweighted
    • Input and output measures
    • Routing and bills of activity
  • Strategies that compliment strengths, weaknesses and profit zones
    • Product and service profitability
    • Customer and market profitability
    • Product line profitability
    • Customer profit vs. customer value
  • Strategy maps that translate strategy into action
    • How to get from present state to future state
  • Control and feedback
    • Traditional financial measures
    • Performance vs. financial budgets, standards and targets
    • Performance vs. non-financial budgets, standards and targets
  • Assessment
    • Functional benchmarks, PIs and KPIs
    • Scorecards vs. dashboards
  • Planning and decision support
    • Pricing and quoting
    • Budgeting vs. rolling forecasts
    • Decisions covering multiple periods
    • Make/buy decisions
    • Outsourcing decisions
    • Onshoring/offshoring decisions
    • Capital expenditure decisions
    • Target costing
    • Discrete event simulation
    • Supply chain management
    • Product mix management
    • Manpower planning
  • Costing conflicts
    • Discussion cases – conflicting ideas about costs
  • Organizational management accounting assessment
    • Discussion cases – conflicting ideas about costs

Teaching Method

  • Group live instruction, discussion cases, examples, group work, open discussions
  • Use of case studies and real-world examples to illustrate the practical application of management accounting practices
  • Interactive participation is encouraged
  • All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Instructors

The instructor for this course will be drawn from one of our core faculty of subject matter experts. Further details will be published at the earliest opportunity.

Venue

Our seminars take place in 4 star professional conference facilities, generally in city-centre hotels like the Marriott, Sheraton or Hilton brands. Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available. Coffee and lunch will be provided.

CPE/CPD Accreditation

IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org .

 

Field of study: Accounting

Prerequisites

Understanding of basic management accounting principles and practices. No advance preparation is required for this course.

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