Each of the Principles underpins the 14 practice areas that the management accounting function needs to do well, in order to assure their stakeholders of sustainable financial performance.
The practice areas are as follows (select + for more information):
It sounds simple, but cutting waste enhances value generation. By identifying and reducing waste generation, finances can be freed up and diverted to areas of the business that will drive value generation.
Find out more about Cost transformation and management.
This is defined by clarity of information. To predict future performance, management accounting provides a comprehensive view of financial and non-financial performance, business models, risks and strategy.
Find out more about External reporting.
By closely scrutinising the organisation’s financial strategy, management accounting can identify opportunities for re-allocation of resources in the implementation of a robust, rewarding financial strategy that achieves agreed business objectives.
Find out more about Financial strategy.
Through comprehensive documentation of an organisation’s policies, systems, processes and procedures for risk management, management accounting can maximise value generation within the established framework.
Find out more about Internal control.
This practice area takes into account strategy, prioritising options, affordability and acceptable returns in assessing potential investments.
Find out more about Investment appraisal.
From people and projects to sales volumes and revenues, management accounting controls performance against agreed targets, at all levels of the business.
Find out more about Management and budgetary control.
Management accounting works with the business in deciding the most business-beneficial products or services to provide, determining the selling price and potential discount structures.
Find out more about Price, discount and product decisions.
Full integration of all aspects of a project means the project delivery team have everything they need, when they need it, to meet the project’s objectives on budget, on time – and to the required standard.
Find out more about Project management.
Management accounting ensures that all statutory and regulatory obligations are met. This prevents penalties, naturally; but more than that, it’s simply the good practice management accountants pride themselves on.
Find out more about Regulatory adherence and compliance.
Organisational decision-making relies on proper, timely resource management. By aligning resources with strategic objectives, management accounting can help the business continually improve, efficiently and effectively.
Find out more about Resource management.
This practice area takes internal and external factors into account, to identify, assess and respond to risks that arise from an organisation’s activities.
Find out more about Risk management.
By examining the role of tax in the financial analysis and decision-making processes, management accounting can proactively manage the organisation’s tax position, to meet legal and business requirements.
Find out more about Strategic tax management.
Management accounting aids the handling of all financial matters, whether that’s generating funds internally, managing currency and interest rate risk, or simple fund and cash management.
Find out more about Treasury and cash management.
While not strictly part of the management accounting function, this is included as a practice area because management accounting makes such a significant contribution to the parts of the business examined by an internal audit.
Find out more about Internal audit.
Download the Global Management Accounting Principles.
View the summary and the full Global Management Accounting Principles framework (available in different languages).
Watch the video with expert Naomi Smith, FCMA, CGMA as she navigates you through the Performance & Practice Areas.