Course Description

Ultimately costing principles, such as the causality principle, must be converted into practical practices with supporting tools. This presentation examines how cost modeling has evolved over the last century. It will describe the trends and obstacles that have helped or delayed developments.  These evolving areas and trends include:

• The expansion from product costing to include channel and customer profitability reporting and analysis.
• The integration of managerial accounting with other enterprise and corporate performance management (EPM/CPM) methods (e.g., the balanced scorecard, incentive compensation, risk management, supply chain management)
• The shift from historical reporting to predictive accounting (e.g., marginal / incremental costing; capacity-sensitive driver-based rolling financial forecasts, performance-based and driver-based budgeting, customer lifetime value [CLV] )
• Imbedding analytics into managerial accounting (e.g., correlation and segmentation analysis, recursive partitioning with decision trees)
• Acceptance of two or more co-existing managerial accounting methods
• Chargebacks to internal users and service level agreements of information technology (IT) and shared services.
• Recognition of barriers slowing the adoption rate of advanced managerial accounting (e.g., resistance to change, being held accountable, weak leadership) to gain buy-in.

Learning Objectives

• Identify how management accounting trends have expanded accountants from “bean counters” to “bean growers.”
• Recognize how to calculate profit and loss statements for customers displaying profit margin layers.
• Discover how to identify and differentiate strategic KPIs in a balanced scorecard and operational performance indicators (PIs) in dashboards.
• Identify how to perform “predictive accounting” for capacity-sensitive driver-based budgets / rolling financial forecasts, what-if analysis, and outsourcing decisions How to imbed statistics and analytics into product, channel, and customer profitability analysis.

Prerequisites

• None

Who Should Attend

CPAs, accounting/finance professionals who work with management accounting and reporting.