Strategic management accounting is about supporting businesses internally and help them improve their performance. In larger organisations with diverse finance functions dedicated management accounting function plays a significant role in analysing and generating management information to help decision makers to manage the performance and risk management aspects of the business.
Strategic Management accounting in SMEs
SMEs are mostly owner managed and most of them employ a bookkeeper for data processing requirements and an external Accountant to prepare and file statutory accounts and tax returns. Both these disciplines does not provide the SMEs owners the forward-looking information to help them measure their businesses performance.
In recent times many accounting software products increased their capabilities to give the managers a set of key figures to give a snap shot of the business at a point in time. However they don’t cater for helping business owner to make decision in a specific business cases. And in many cases of functionalities of the software is not known to the user or turned on to help the decision maker.
Strategic Management accounting is vital part of performance evaluation and analysis and pay an important role in planning and decision support. SMEs cannot afford to miss on strategic management accounting. Many high performing SMEs are demanding for better management information and focusing on changing their internal reporting.
To drive efficiency and to be competitively positioned in the market SMEs should take actions to get the right skills in place to capitalise on opportunities. Engage a management accountants or demand for these services from your external accountants, it’s key to your success and sustainability.
