If Hollywood can make sequels to movies, why can't I? This article is the sequel to my previously published “Can Accountants Grow the Beans, Too?” article.
Here is an edited excerpt to an e-mail to me from an accountant I have known for years. His name will remain anonymous for his own protection.
"I left my job with Xxxxx in 2009. Most of the VPs there did not understand strategy execution or managerial accounting. A few others and I tried to spread the word for about two years. It was just always a struggle to get buy-in for strategy execution, a balanced scorecard, dashboards, or driver-based budgeting and rolling financial forecasts. Our guys weren't really interested in profitability modeling or using any activity-based costing. I tried to do one driver-based budgeting project, but their accounting software could not handle it. It is sad."
What can be said after reading his note? My intent is not to alienate some readers or exhibit the inflammatory and uncivil rhetoric and language we have been reading about the media and politicians in the USA. I simply want to illustrate (again) that the field of accounting will eventually need to deal with its problem of denial.
Accountants' Problem of Denial
By "denial," I mean the false belief that accounting's main purpose is to collect the data, validate the data, and report the data. It is so much more. The accounting profession must shift its emphasis to be more customer-centric. This is similar in industry to how suppliers now often are viewed by customers as a commodity. In response, suppliers are expected to offer ideas and innovation to customers to differentiate themselves.
Simply replace “users” with “customers” and “suppliers” with “accountants” in those last sentences. You will then understand what I mean. Inevitably, accountants will need to embrace enterprise performance management and business analytics. To sum up, financial accounting is about valuation. In contrast, managerial accounting is about creating value. Bean counter or bean grower? ###