Cost And Management Accountant: A Panacea for Sustainable Business
Costs of products and services act as denominator for measuring the performances and efficiencies of the factors of production. Generally, Indian products and services are less competitive as compared to other countries due to inefficient management of cost. In such scenario, reduction and controlling of cost will enable companies to pass the benefit to the society at large.
Cost and management accountant can act as a catalyst in the nation building with the implementation of cost reduction and cost controlling techniques and effective strategic management. Cost and Management Accountant can play a vital role in the team for coming up with different ideas for improving the operating ratio. Cost and management accountant can be the best resource person to make researches and suggest measures for cost control and other strategic management methods for enhancing operational efficiencies. He/ she can make researches in different sectors and areas demanding more expenses and can suggest the cost efficient methods for application of amount to be spent on different activities. Cost and Management Accountant can act as a game changer for the development of social India and new India.
Government of India has prescribed that a certificate with regard to cost efficiency from practising CMAs is to be attached with the project proposal under ‘’Make in India’’ scheme and this is a welcome step. But why cost audit is not applicable for all Indian Industries irrespective of turnover is not clear. Do the companies below the statutory limit of cost audit are not contributing to the GDP of India? The applicability of cost audit to all companies can prove to be an effective tool for cost management and nation building. Cost audit can be helpful to the industries for making the product and services competitive on the global arena. Cost audit is forward-looking and diagnostic in nature. There is need to identify the scope, relevance and significance of cost audit by Indian businesses. Performance or outcome budgeting along with performance costing will prove as an important management tool that will enable Indian companies to be the market leader. Performance budgeting is the preparation of budget based on performance, and activities of project. It identifies, analyses and simplify the objectives to be achieved over the given time period. The resources are allocated according to the performances and objectives. Cost and Management Accountant can help in the deployment of performance budgeting.
Innovation is a backbone for any industry and keeps the industry vibrant. Without innovation and product development an organization seems to be lifeless and torpid. Cost and Management Accountant plays an important role in the innovations of an organisation. Some of the roles played by Cost and Management Accountant in innovations can be summed up as follows:
- Acts as a part of value-added team or innovation team.
- Active participation in the formulation and implementation of innovative strategies.
- Helps to translate strategic intent into operation.
- Provides feedback on quality improvement efforts.
- Helps to set priorities for investment and improvement activities.
- Helps in evaluation of innovative project and suggests measures for cost reduction.
- Guides for product mix decisions, helps to choose raw material supplier, and structuring the target market.
Cost and Management Accountant plays an important role in nation building and can act as a marshal. He or she can actively take part in formulation and implementation of innovative strategies. Cost and Management Accountant (CMA) can analyse the operating expenses and revenues and can suggest the measures to improve the operating ratio and operational efficiency. Above all, “Behind every successful business, there is a CMA”.