Business Acumen: Do Accountants really get it?
Let’s cut to the chase: a business exists to make or
You would think the strong technical or financial acumen they possess to generate such detailed reports about profits should translate into strong business acumen, right? Wait a minute!
ACCOUNTANTS SEEM TO UNDERSTAND BUSINESS ACUMEN QUITE DIFFERENTLY
Good business acumen does not mean you can measure and report on assets, liabilities, equity, revenues, expenses and/or profits; nor can you say you do have it just because you work in a business entity.
Rather, good business acumen means you can actu
execute decisions that almost consistently bring about the most profitable outcomes for the business over time!
The first problem for accountants is that revenue can only be
In fact, the marketing mix itself which entails so much
umes; yet sales volumes
The second problem is on the cost minimisation side, taking quality into consideration. Although armed with traditional costing techniques (e.g process, job, batch, standard, absorption and marginal costing) and modern management accounting techniques (e.g activity based costing, life cycle and target costing), most business expenses are actually outside the control of the finance function (e.g. Human Resources will control Wages and Salary costs whilst Procurement will control material purchase costs; as illustrated in our previous article, pg. 38).
HOW CAN I -AS AN ACCOUNTANT MEASURE MY BUSINESS ACUMEN?
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