ACC501 Assignment: Accounting for Decision Making

Trends in Management Accounting
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Trends in Management Accounting
In management accounting, as revealed in the YouTube videos, there has been a shift from product to channel and customer profitability analysis. This shift has been facilitated by the diverse nature of customers whereby some are low-demand and others are high-demand (Cokins, 2016). Thus, managing customer profitability has become an essential part of management accounting and it requires being more customer-oriented. It is the only way in which the less-profitable customers can be made more profitable. In addition, more value can be added to the more-profitable customers, thus, the importance of customer profitability analysis. This shift, however, requires the accounting function to be reorganized (Islambegovic & Gadzo, 2015). In addition, customer relationship management (CRM) models should also be fully utilized to aid in this shift, thereby increasing organizational financial performance.
A real-world example of this shift from product to customer and channel profitability is a global, UK-based bank that shifted to channel profitability (Cobb, n.d.). This bank used its bra...