The Future of Management Accounting

The Current State of Management Accounting

Traditional management accounting practices are well-established: they have been used for over 100 years. These include capital budgeting, return on investment, variance analysis and standard costing.

Since the 1980s we’ve seen the arrival of more contemporary accounting practices: activity-based management, strategic cost management, the balanced scorecard and value chain analysis, to name but a few.

These newer practices were developed because of the need for broader applications: to target a wider range of success factors, and to include an external, rather than simply an internal focus.

Things have changed in the past, so, unsurprisingly, they are changing again now. Management accounting needs to be able to work alongside a world that’s shifting: one that is becoming ever more driven by technology. Many accounting trends we currently see have technology at their core.

 

Emerging Trends in Management Accounting

There are various trends on the horizon when it comes to management accounting – and some of these are already happening.

New regulations and reporting standards are regularly introduced, which means that business owners and accountants must stay up-to-date in order to maintain compliance. There is an increased focus on sustainability across all sectors, meaning ESG considerations may be more of an issue when it comes to financial analysis and reporting.

Businesses are becoming more and more global, meaning that a good knowledge of international reporting standards is needed more than ever – and all of the above means that continuous learning is required to understand the future of management accounting.

Amongst the biggest accounting trends, though, is the use of technology in accounting, with digitisation revolutionising the sector.

 

The Impact of Technology on Management Accounting

Woman working on calculator to calculate business data

Technology in accounting is reshaping the sector in a huge number of ways. It can help you to improve data quality and accuracy. It can help you to automate tasks that are routine or mundane. It can allow for better collaboration and communication, as well as giving you the ability to access data from anywhere. It can also make data analysis significantly easier, doing the hard work for you.

All of the above is possible thanks to a variety of technological advances. Cloud accounting is making a big difference to collaboration and data access anytime, anywhere. AI-powered software will perform tasks like reconciling accounts, categorising expenses and generating financial reports. Blockchain, meanwhile, could take on some of the more transactional elements of accounting.

Accounting is becoming increasingly more digital – and there’s huge scope for technology to increase its impact over the coming years.

 

Examples of technological advancements

Technology in accounting is making an incredible impact in all sorts of ways. Here are just five of the benefits that digital advancements offer.

  • Simplified accounting. Accounting can be complex: it’s unsurprising that so many business owners pay accountancy firms to handle this side of the business for them. Accountancy software, though, can reduce some of this complexity. Once you’ve inputted the raw data, the software does the hard work for you, making it easier for you to organise and understand your business finances.
  • Global digitisation. Across the globe, software is allowing business owners and accountants to digitise many time-consuming and repetitive tasks: things like expense tracking, invoice management and data entry. Whichever countries you do business with, software can help to keep things consistent – as well as more efficient.
  • Automated data processing. Accounting software allows you to collect and analyse data not only more quickly, but also more accurately. It reduces the risk of human error and gives you impressive insights without you needing to spend hours trawling through data.
  • Saving time. The digitisation of accounting – as well as the introduction of tools like AI – reduce the need for manual data input and manipulation, and can also analyse your accounting data for you – freeing up your time to focus on growing your business.
  • Easily accessible data. Cloud computing has made a huge difference to accounting practices. Rather than being stored on a central server in your workplace, you can now store it all on the cloud. This means that you can access your accounting data both wherever and whenever you want.

 

Preparing for the Future: Skills and Strategies

As well as process-based and technological changes, preparing for the future of management accounting includes developing the right strategies to get ahead.

Five strategies you could focus on to help you adapt to change are:

  • Learning new skills. Learning new skills takes time – and we know that you won’t have the time to learn absolutely every new development in management accounting. Focus on those that are most relevant to your business and that you feel most comfortable with, and consider working with a trusted partner for those that may be beyond your remit.
  • Embracing technology. It’s technology that is at the forefront of many developments, both within the management accounting sector and beyond. If you want to get ahead in the future, you must get on board with technological developments in the sector.
  • Networking and collaborating. A network of peers can provide you with people to bounce ideas off, as well as somewhere to discuss and collaborate on new trends.
  • Being flexible and curious. Open-mindedness and a willingness to adapt and learn will stand you in good stead for the arrival of new accounting trends.
  • Seeking feedback. As with anything new, going it alone can feel challenging. Don’t be afraid to ask for feedback on what you’re doing – and we’re here to help.

 

Why Join QAccounting: Staying Ahead in Management Accounting

We know that accounting can feel like a burden at the best of times. Feeling that you always need to be up-to-date with the latest trends can just add to that burden.

That’s where we come in. Our full accounting services take care of absolutely everything for you, with a dedicated Client Manager, state-of-the-art accounting software and our own accounting app.

We’re here to answer your questions whenever needed: if you’re worried about staying ahead in management accounting, pick up the phone or email us as little or as often as you like. We stay ahead of current accounting trends so you don’t have to, giving you complete peace of mind.

Conclusion

The world of management accounting is one that is continually evolving – which means that those who handle financial accounts need to stay up-to-date to ensure that they remain compliant. It may seem like hard work, but it’s not just compliance that you’ll benefit from: many of these trends will also make your financial reporting and analysis far easier.

You don’t need to go it alone. With QAccounting you’ll have a trusted partner by your side, helping you to make sense of the new management accounting landscape and giving you the time to focus on growing your business.

Click here to find out how we can help.

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