How Does Managerial Accounting Adds Value to an Organization?
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Managerial accounting creates/records/analyzes internal data that helps the company find faster, better, and less expensive ways to do things. This is similar to/can be called cost accounting where (in a manufacturing setting) relationships are found between the price of materials, the rate of wages to use materials of different quality, and the time needed by various skill levels to use the materials. The goal is to find the best combination of price, wages, and skill sets. You can get a CMA: Certificate of Managerial Accounting.
Managerial accounting creates/records/analyzes internal data that helps the company find faster, better, and less expensive ways to do things. This is similar to/can be called cost accounting where (in a manufacturing setting) relationships are found between the price of materials, the rate of wages to use materials of different quality, and the time needed by various skill levels to use the materials. The goal is to find the best combination of price, wages, and skill sets. You can get a CMA: Certificate of Managerial Accounting.
Businesses live or die on the value of their products and services. Similarly, individuals and departments within businesses survive on the value of their internal products. Accounting is no different. Accounting provides both services and products that add value to an organization.
The most important thing in accounting is to understand accounting and your own accounting systems. But, if you want to truly succeed, think beyond debits, credits and reconciliations and become an expert in your companys industry. Financial accounting knowledge transfers fairly seamlessly from one business to another but specific industry and management accounting knowledge may not and it is through that kind of knowledge that you can add value to your organization.
Research your industry, spend time with operations people, become familiar with what their processes are and the order in which they occur. Learn how they use their information systems, understand the logic behind both the information they track and the order in which that information is organized. Become familiar with the way your systems interact, how they are dependent on each other and how they are independent of each other. Find out from them what information they have and what information they wish they could have. Ask them if they use reports from accounting, if so, do they find them to be reliable, timely and useful. (Always make sure to have the appropriate permissions for internal research).
As an accountant you perform the financial functions that keep a business going but you are also the custodian of a wide variety of business information. In addition to standard accounting data, you have access to information about lenders, suppliers, customers and operations. As you increase your understanding of your company and industry you will increase your understanding of the information available