Today’s business environment places a premium on being able to extract value from data and to increase connectivity throughout the organization. One way to achieve this is by using managerial costing models – but are those models really providing all the information they can? 

To address that question, IMA^® (Institute of Management Accountants) recently released a Statement on Management Accounting, “Costing System Attributes that Support Good Decision Making,” an important resource for management accountants interested in addressing the internal decision-support capabilities of their organizations’ costing systems. 

“The need for effective managerial costing systems is often overlooked and current costing practices at most organizations are not providing adequate decision-useful information,” said co-author Raef Lawson, Ph.D., CMA, CSCA, CPA, CFA, CAE, IMA vice president of research and policy. “Organizations looking to succeed in the digital economy need to develop managerial cost models that enhance managerial decision making.” 

The report provides the tools to: 

• Assess the level of internal decision-support cost information an organization needs to enable managers to meet the organization’s goals and objectives; 
• Evaluate an organization’s current managerial costing capability and identify areas for improvement; and 
• Evaluate managerial costing solutions, such as software, to determine if they satisfy an organization’s information and decision-making needs. 

The report serves as a companion to an earlier SMA, “Developing an Effective Managerial Costing Model,” that builds on IMA’s Conceptual Framework for Managerial Costing (CFMC).

This Statement on Management Accounting, written by IMA’s Managerial Costing Task Force, is part of IMA’s ongoing efforts to advance a key competency of professional accountants in business. The members of the Task Force include Lawson, who serves as chair; Kip Krumwiede, IMA director of research; and Gary Cokins, Doug Hicks, Monte Swain, and Larry White. 

To read the full report, visit this link. You can find additional details about management accounting best practices at Statements on Management Accounting on the IMA website.