Today we will speak again about the importance of an accounting consulting service for the operations of the company. To do this, we will take everything back where we left off, in the part that talked about the importance of management accounting (also called costs accounting) within the company.
All activity carried out within a company must have a direct or indirect purpose to generate value for the client (or for some of the stakeholders) giving a wide profit margin that allows the company not only to survive, but to grow. In order to achieve this efficiently, we must have a very strong control over our expenses and know precisely how much it costs us to provide each product or service. This is what management accounting is all about.
Management accounting is part of analytical accounting, that is to say, it is a service in which nothing is accounted for. Rather, it goes from a previous accounting to results that allow the interpretation of specific points of the company's state. In the case of management accounting, it is about allocating each cost to the place where it is producing value. In the end it allows to see unnecessary expenses and to improve the efficiency of those who are, as well as to calculate prices, margins of profit etc ...
It may seem simple at first, but it is generally surprising how many things simple management accounting can tell us about the state of our business. From sunk costs that we had not considered initially, to discover products of low profitability in the business that should be reviewed and in general many problems that at first glance are invisible with normal accounting.
In general, management accounting, apart from being the great unknown, is something that is used too many times in case there are problems within the company. Its usually ignored the enormous capacity of this management tool to avoid problems in the first place, as well as to make management in general extremely more efficient.
In short, a tool that every company with a minimum turnover should have.