Finances Future: Challenge or threat?-Management Accounting
This article is a bout the changing demands of the business world and the impact it will have on management accounting. According to this article the business role that management accountants play will be significantly different in the future. While this change is inevitable it is unclear how many of today's accountants will be able or willing to adjust to the change and conform to what is being called "New Accounting."
Accountants in the future will have to play a much larger role in their organization. Becoming a change agent, someone who can help accelerate change in an organization. This is a problem for most accountants who are used to doing the same job year after year with little to no change. Since the introduction of the computer management has recognized that the PC can perform in much less time many of the tedious number crunching activities accountants spend hours doing. As a result of this accountants are being asked to do more and become analytical and proactive, looking into the future and joining with management in making and taking responsibility for all those tough decisions. Management expects the accounting department in addition to its role processing transactions to serve as the central information hub and purveyor of all sorts of data stored on the computers.
Accountants doing the same time that all these changes were happening due to PC were also facing change due to the new idea of "reengineering." This is the idea of going beyond seeking efficiencies and asking is this business process really necessary?. And if it is how can it be designed to better serve the business. If a task is unnecessary then the people who perform that task are as well which results in downsizing causing anxiety over job security. One of the first department to face reengineering was finance because much of its work deals with metrics, qualifying cost and impact of business processes. Top managers demanded studies of how well or how bad the metrics of their processes were before allowing reengineering consultants to redesign the organization. In the decade since reengineering was first employed the average cost of running a finance department has plummeted some 37% to 1.4% of an organizations total revenue from 2.2%. Further improvements are...