Implementation of Managerial Accounting in the Organizational Process

To correctly understand it, managerial accounting must be distinguished from financial accounting. Unlike financial accounting, which is aimed at external users (investors, creditors, regulators), managerial accounting is intended exclusively for internal organizational needs.

Furthermore, managerial accounting provides more detailed information that can be tailored to the specific needs of various departments and management levels. Managerial accounting is also future-oriented, unlike financial accounting, which is focused on actual business results. For example, managerial accounting includes forecasting, budgeting, and planning.

Managerial accounting offers numerous advantages, such as providing detailed information on costs, revenues, profitability, and other key indicators. The data slice can be customized, for example, management can focus on the business segment that is currently a priority for development. Due to such detail and flexibility in modeling requirements, managerial accounting helps assess various development scenarios for the company, forecast financial results, and adjust strategies.

A key advantage of managerial accounting is understanding how efficient the business is, where there are gaps and unprofitable areas. Based on this understanding, the company can build plans to achieve efficiency and increase business profitability.

In summary, managerial accounting allows for improved business management quality by making it fully transparent.

1. Analyzing the Current Situation

• Evaluation of Existing Processes: Analyze the current accounting and management system to understand what data is already being collected and how it is used.
• Determining Needs: Identify which managerial data is needed by management for decision-making. This may include information on costs, revenues, profitability, resource efficiency, and other key indicators.

2. Setting Goals and Objectives

• Defining Goals: Clearly articulate the results you want to achieve through managerial accounting (e.g., improving cost control, increasing profitability, optimizing business processes).
• Setting Objectives: Based on the goals, establish specific objectives for implementing the accounting system, such as automating reporting, creating new analytical tools, or integrating data from various departments.

3. Developing the Managerial Accounting System

• Choosing a Methodology: Determine which methods and tools will be used (e.g., ABC analysis, marginal analysis, budgeting).
• Developing Reporting Forms: Create report templates that will be regularly provided to management. It is important that they are clear and contain the necessary information for decision-making.
• Defining Indicators: Select key performance indicators (KPIs) that will be used to evaluate the performance of departments and the company as a whole.

4. Selecting and Configuring Software

• Market Analysis: Study available solutions on the market that can support the chosen managerial accounting methods (e.g., ERP systems, specialized software for cost accounting and project management).
• Integration with Existing Systems: Ensure that the new software can be integrated with the company’s existing information systems (e.g., accounting, CRM).
• Setup and Testing: After choosing the software, configure it to the specific needs of the company and test it to ensure it works correctly.

5. Staff Training

• Training Key Employees: Conduct training for employees who will directly work with the managerial accounting system. These may include financial analysts, budgeting managers, and department heads.
• Explaining Goals and Benefits: Explain to all involved employees how and why managerial accounting is used to ensure understanding and support at all levels of the company.

6. Pilot Implementation

• Launch in One Department: Start with a pilot implementation of the managerial accounting system in one department or on one project. This will help identify and resolve potential issues before full deployment.
• Process Adjustment: Based on the data received and employee feedback, adjust the processes and accounting systems if necessary.

7. Full Implementation

• Expansion to the Entire Company: After a successful pilot launch, the managerial accounting system can be deployed across all departments of the company.
• Monitoring and Control: Regularly monitor the effectiveness of the new system, audit data, and improve processes as needed.

8. Continuous Improvement

• Effectiveness Analysis: Periodically analyze the effectiveness of the managerial accounting system, assessing how well it helps achieve the set goals.
• Making Adjustments: As external and internal conditions change, adjust the accounting system, adding new indicators, reports, and analysis tools.

Implementing managerial accounting is a process that requires time, resources, and the involvement of all participants. However, a well-organized managerial accounting system can significantly enhance the efficiency of company management, ultimately leading to improved financial results and the achievement of strategic goals.