Step-By-Step Instructions For Implementing Management Accounting.

Step-By-Step Instructions For Implementing Management Accounting.

We always start with accounting, build a management accounting system, help select and train accounting specialists, and establish business processes related to the construction of management accounting.

Do you want it yourself? – Please, here is a brief step-by-step instruction on how to do this!

  1. First, you need to choose a program for managing management accounting. For small businesses, building management control in a separate program, for example, in 1C: UNF, is better. For large businesses, management is often built on accounting data, kept entirely in white without using imaginary and sham transactions.
  2. Then, you need to hire people responsible for collecting and entering data into the program. Entrusting this to an existing accountant or manager is a bad idea; they have much of their work to do. This idea has never “taken off” among our clients, although 4 out of 5 start with this. This increases the management implementation period until a particular executor is hired – he can be called a management accountant or economist.
  3. Then, you need to establish operational data collection and entry. The accounting department of small companies is accustomed to receiving documents once a month on the tenth day of the month and entering them on the twentieth. This is unsuitable for management – data must be taken promptly from accounts, contracts, personal accounts, billing and EDI.
  4. The next step is the collection of management reporting in three forms. The DDS is usually easy to assemble, but the Statement and Balance Sheet will not be assembled until the work of the third stage is debugged.
  5. The final stage is a financial analysis of the collected indicators.

The Balance Must Be Right!

Look: the “out of balance” situation is technically impossible in an accounting system based on double entry.

  • If an expense is lost somewhere, the unclosed advance payment will “hang”, which means an enormous debt of suppliers to your company.
  • If you record an expense on the wrong date, the balance will still be in a standard accounting program. But if you keep records in Excel and manually collect the balance in the following table, it’s no wonder you lose 108 thousand and a million.

If the balance does not come to 6,000 rubles, there may be two errors: by 60,000 rubles in the asset and by 54,000 rubles in the liability. If the balance does not add up to a million, there may be two errors – 10 million in assets and 9 million in liabilities.

Is it possible to run a company normally when you have 20 million errors in your finances?

What Does A Good CFO Do?

The right outsourced financial director and in-house ones start by building a system. Management accounting systems.

He will not undertake to give you three basic reports or financial analyses if you do not have a reliable system for collecting and recording data. He will ask you to build this system.

If you are a Wildberry seller, it will help you build product accounting, integrate the Wildberry API into the accounting system, and differentiate product flows across marketplaces.

If you are a manufacturing worker, he will introduce costing, adjust the write-off of the cost of manufactured products, and teach you how to evaluate and manage finished product inventories.

If you have an IT company or DIGITAL agency, it will provide an accounting of customer debts, financial results by departments, projects and unit economics by customers and products.

You have a different type of activity: catering, services, etc. – he will delve into your tasks and problems and build systemic management accounting.

The top of the implemented system will be a financial monitor – a dashboard with key indicators and reports.

After you receive a completed dashboard with indicators, the right finder will conduct a financial analysis and present the results to the owners.

Why Don’t Many People Do This?

Most financiers, financial analysts and directors I know do not take on the task of building a system when they are outsourced. Because it is “long and expensive” if done well. The implementation of management accounting can be compared to the implementation of a CRM system, only even more complicated. CRM is usually implemented only for the sales department, and ERP – a management accounting system – for the entire company. Each employee will be involved in one way or another, either at the stage of providing data or evaluating results.

Implementing a management accounting system takes from 4 months to a year.

In Profdelo, for example, such a service costs 90,000 rubles per month at the implementation stage and about 60,000 rubles per month in operation: collection of reports on ready-made data and financial analysis of the results.

Our advertisement should be here, but I will leave you a gift: a free consultation with the financial director on building a management accounting system.

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