Challenges in advanced management accounting
Challenges in advanced management accounting

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Challenges in advanced management accounting

Conclusion

There are many challenges facing businesses in dynamic economic environments. In this course we have briefly considered the use of a strategic perspective in management accounting and the application of this approach to pricing and project evaluation.

Customer profitability analysis encourages a focus on strategically evaluating customers and the costs and effort the business puts into engaging with them. It draws on an activity based approach to trace the cost of the activities to specific customers. As with all financial analysis – it should be considered in the light of other factors, for example whether or not the less profitable customer will help to open up a new market.

Project evaluation is fundamental in a strategic perspective as organisations make decisions about where to invest for competitive advantage in the mid to long-term future. A complaint about using discounted cash flow analysis is that it is too difficult to forecast cash flows over five (or even less) years into the future. In this course we provide the technical understanding for the application of discounting and techniques that support the explicit consideration of uncertainty and risks to improve the basis for decision making.

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