Today’s manager can use various tools to enhance decision-making and (management) control and to collect and structure information to ensure that the core business is implemented effectively and efficiently.
The balanced scorecard, for example, where performance is measured along four different dimensions (financial, process, customer, and learning) is an important tool. Having these dimensions ensures that both short and long-term issues are considered and measured.
Other tools, such as different costing techniques are useful, where the goal is to estimate product costs as accurately as possible. Activity-based costing is one example where every activity in an organisation is defined and costs of that activity are estimated. Product costs are then also dependant on how many activities go into one product type.
One tool we can’t live without in applying management accounting is a proper cost accounting system, primarily because it is required by regulators. Whether it is sophisticated or not depends on the complexity of the organisation and whether management requires more detailed information. According to Prof. dr. Alexander Brüggen “you can hardly run a business without a costing system. But you could with a simplistic one.”