Discussion: RESPONSE

RESPONSES MOD 2 DISCUSSION

Daniel Parsons

Mr. Cokins identified two different, yet equally important emerging trends in his videos. I found I was able to relate the best with the second video regarding predictive accounting.  Within my unit we are allocated an annual budget, but this budget often varies year to year.  We have what Mr. Cokins speaks to as fixed costs that we can anticipate recurring yearly, but we also have those that are new year to year (7 Trends in Management Accounting).  We can fairly easily predict these fixed costs, but it is important to consider how these costs may change over time.  Secondly, it becomes important to be able to efficiently predict and utilize those of the unknown.  The budget within our military unit is unique when compared to some civilian companies’ budget because we want to effectively utilize the amount we are allocated so we may be authorized an equivalent amount the following year.  We obviously don’t want to be wasteful here and always be good stewards of the taxpayer’s dollar.  Predictive accounting comes into play because we want to utilize the entire budget, but we want to acquire as many different needs for the unit as possible.  Here we must predict how we will adequately finance equipping our force for the mission at hand with the ever-changing advancements in technology and equipment.  “Predictive accounting seeks to understand the future” (Brimson, n.d.).  It is the change of both the fixed costs recurring every year along with the ability to forecast future needs for the unit that are what associates predictive accounting with my experience.

References:

7 Trends in Management Accounting – Trend 3. Authored by: IMA. Located at: https://youtu.be/3cwdelVpNRA. License: All Rights Reserved. License Terms: Standard YouTube License

Brimson, J. (n.d.). Predictive Accounting Article. Retrieved October 08, 2020, from http://www.valuecreationgroup.com/predictive_accounting_article.htm

Carroll Freeney

  In this discussion it is important to first understand the purpose for management accounting. Each organization needs accountants to be able to collect, interpret, and report data needed so that the decision-makers can the best decision possible. Even as accountants have done their due diligence to catch up with the increasing requirements of managers to help make those positive decisions. Ok, let’s look at financial forecasting, accountants and decision makers must work together to analyze historical financial data to help with determine future transactions. We know that predictive accounting is the analysis of future projections based off the statistical data, trends, and past performances. Within my own experience with trends and predictive accounting, I played my role as the manager to present the cost data and usage for consumable by all associated accounts. I also had to forecast parts needed for future projects as well the replenishment requirements to meet demand levels.

Wong, K. (2014, July 21). Blog. Retrieved October 08, 2020, from https://www.truesky.com/the-shift-to-predictive-accounting/

Fellers, D. (n.d.). The Shift Toward Predictive Accounting. Retrieved October 08, 2020, from https://ignitepossible.bramasol.com/blog/the-shift-toward-predictive-accounting