Trends Management Accounting product centric customer centric

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There are three requirements that can be combined in one document:

1) Required:

Comment and expand on a topic discussed in the videos and provide a real world example from the news or your own experience. Ensure you provide two references.

Presence during both weeks of the module and a minimum of three postings are expected, one original posting and two responses to colleagues. Minimum required participation does not guarantee a perfect score.

ALL RIGHTS RESERVED CONTENT

7 Trends in Management Accounting – Introduction. Authored by: IMA. Located at:https://www.youtube.com/watch?v=gRyW2_Ay2Cw. License: All Rights Reserved. License Terms: Standard YouTube License

7 Trends in Management Accounting – Trend 1. Authored by: IMA. Located at:https://www.youtube.com/watch?v=gRyW2_Ay2Cw. License: All Rights Reserved. License Terms: Standard YouTube License

2) Respond to the following post:

I enjoyed the second video better than the first. I found it to be more relatable to my job at the liquor store. We have both kinds of customers in the store – high maintenance and the low maintenance. Generally our high maintenance customers tend to buy higher priced items and demand a lot of personal attention. These kinds of customers almost never tip either. Our low maintenance customers are generally always happy to come in and they don’t require any help making decisions on their purchases. These tend to be our blue collar workers. They ask how you are doing and most often leave a little tip. In our town’s demographics, we are generally a blue collar town. We have a lot of low income housing and we support a lot of our families at the school with free breakfast and lunch programs. I have noticed that the liquor reps aim their campaigns towards the low maintenance customers. Free t-shirts, cups and extra bottle of liquor with purchase of the cheap beer or wine. These items do not normally go with the high maintenance customer’s purchases – the scotches, champagnes, etc. When the samples are given out with the lower end products, it encourages the low maintenance customers to try a new product and hopefully they will switch brands of beer or wine to the new company. (White, 2013). If it is on sale and has a freebie to go with it, it is almost a guaranteed sale in our store. It is always interesting to start a new shift and see what the freebies are for the week.

5 Ways Companies Win by Giving Stuff Away – White, Martha C. Retrieved from: http://business.time.com/2013/06/24/5-ways-companies-win-

by-giving-stuff-away/

3) Respond to the following post:

Watching the Trends in Accounting video on companies moving from product centric to customer centric really hit home with me. In my experience, property management has always been about revenue per unit (apartment) and how to obtain the highest possible revenue to manage a property for a client. When the recession hit, we were scrambling to not only maintain our management portfolio but also on taking on as many clients as possible to stay afloat. In doing so, we were looking exclusively at how much income we were bringing in.

As time passed, and things stabilized, we began to look at each portfolio individually in respect to how much time was being spent managing each segment. When I did the analysis, I found that of my eighty properties, ten were taking up almost fifty percent of my time. This was primarily due to investors who required outside the box treatment such as specialized reports, weekly status meetings (vs. monthly), etc. This speaks to the part of the video on high maintenance customers vs. lower maintenance customers and profitability by customer (Institute of management accountants, 2014). After further analysis, the profitability of managing these ten properties just didn’t make sense and I was allowed to terminate the management agreements. In time, I replaced those ten properties with thirty and was able to operate them without increasing my corporate staff.

In speaking to my peers at other companies, total units are still the norm. I believe many companies are missing out by not using management accounting to determine the actual cost of managing these units.

Stacey

Reference:

Institute of Management Accountants. (2014, March 6). 7 Trends in Management Accounting – Trend 1[Video file]. Retrieved from

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