In this article, we firstly have a look at management accounting objectives. Then we go a step further and outline a way how we can work leaner whilst still fulfilling the objectives.
Management accounting objectives
The general objectives of management accounting could be summarised as: Assisting the management to steer the company.
This involves important work like:
- Supporting decision-making
How to be lean
For a rough guide, I gladly highlight the following article: Lean finance: 4 awesome tips for busy mgmt accountants.
So what we can do to work leaner is analysing all the current work we are doing. List those things down on a paper or in a spreadsheet.
- In the first column add our task.
- Add a column including your estimate of time every task needs to complete.
- Add another column and judge the importance of the task.
- Add the last column with your estimate of complexity of the task
So after doing that all, you have a nice list containing your most relevant jobs on it.
Now you can apply the E A D system in order to fulfil management accounting objectives in a leaner way:
Apply E A D
Tasks you judged as not important should be eliminated. Those pieces consume your time and attention but don’t really add value to the business. They are don’t belong to management accounting objectives. It is a tough thing to eliminate but it is in the best interest of the business to do it. So eliminate!
With the non-eliminated tasks, you now go further and check the complexity of it. Your aim should be to automate as many tasks as possible. Low complexity work can easily be automated and thus you save valuable time. A nice example for all management accountants is the creation of periodical reports. The creation of monthly financial reports and variance analyses, for example, can surely be automated.
So after you eliminated and automated, assess all remaining tasks in terms of the delegation. This doesn’t need to be the boss to employee delegation. Ask yourself whether you are the person who can perform the task in the most efficient way or not. Here an example: Commenting on monthly sales figures could be a task on your list. You struggle with it because you are not so close to the sales force so you need lots of time to comment. However, the sales director is likely to have way more insight than you. So why not ask him to quickly add the comments on a monthly basis.
After that, you are done with the E A D system. Your list of tasks should be smaller now and you freed up some of your time for other things.
Repetition is the key
To be very lean with your management accounting objectives you should repeat the process of E A D on a regular base. Figure out what works best for you. I personally like to perform this analysis on a quarterly base.