My fellow Society of Cost Management board member, Doug Hicks, in his mid-summer 2011 Executive Letter, brings up the topic “Why is 21st Century cost management still stuck in the middle of the 20th Century?” I invite you to read Doug’s letter and provide your input to this discussion. Doug believes that fault lies primarily with accountants, who are usually very resistant to change. I think the split on our board is between those of us who are practicing cost accountants on one side and the consultants on the other.

My feeling is that the problem is twofold, in recent history, the past 10 – 15 years or so:

1) There has been no unified voice for the costing community. This has mainly acted to stifle communication within the community, including the spread of good ideas, of which we need more debate and discussion. It has also affected advocacy of the profession.

The Society of Cost Management creates a unified voice for the costing community and provides a resource for all cost accountants. For those of you who have not visited the new website at www.costmgmt.org, please do so and give us your feedback. It requires your email address to access most features but you are under no obligation and for now, there is no cost to join.

2) The number of high visibility accounting scandals, which have increased the importance of Financial Accounting. Sarbanes Oxley and associated regulatory compliance has caused a new focus on the quality of financial information.

Understanding and improving profitability is also very important particularly in this economic environment, and while accurate financial reporting is critical, improving shareholder value is paramount. The Society of Cost Management takes the lead in advocacy with our drive for better costing, which you can find at: SCM Costing Project, if you would like to participate, contact us at SCM Costing Project Volunteer. By showing the users of costing information what they should be getting instead of what they are getting, we hope to drive costing to a new level.

Be a costing advocate! Join us today in this important initiative.

It is my distinct impression that Gary Cokins, another member of our board, believes that it is the natural order of things to swing back and forth between financial accounting and management accounting, and things are now primed to start back towards management accounting. See Gary’s blog Beware of Misguided Accountants.

Without spending too much time discussing ‘what caused it?’ we need change the focus of the debate to ‘what can I do about it?’

 

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