By Tariro Mutizwa, Vice President – Africa at AICPA & CIMA, together as the Association of International Certified Professional Accountants
Significant challenges exist both in South Africa and globally, affecting people, organisations, and national economies alike. Global markets have had to contend with increased volatility and uncertainty, adding to an already fragile world.
Day after day, the pressure on economies, organisations, and individuals continues to increase. These challenging times are pushing many organisations to innovate, streamline operations, and continuously find new ways to remain competitive and resilient.
Management accountants drive effective business management in any economic climate, but it is in uncertain times such as these when their knowledge, expertise, and skills really come to the fore. In the first instance, they play a central role in guiding their organisations to mitigate the impact of external, hostile events on the company’s balance sheet to ensure short- to medium-term financial stability.
Beyond this, they leverage their skillsets to help their organisations to re-assess projects and optimise resource allocation, control and manage costs, and invest in new initiatives and opportunities to diversify revenue and drive business growth. They also ensure that their organisations’ risk management processes can handle factors such as rising inflation, energy shortages, or supply chain disruptions.
Cost management
Any organisation can cut costs on a one-off basis, but it takes a great deal more sophistication to drive continuous cost competitiveness while also preserving or enhancing value creation. To plan effectively, organisations should analyse and understand the opportunities and risks – particularly the competitive forces at work – that are prevalent in their key markets. This is where the core expertise of management accountants comes in.
Management accountants analyse, plan, and manage costs to help optimise business performance, supporting their organisations to create value and ensuring long-term success, no matter the circumstance. This includes understanding cost drivers and implementing strategies to effectively control and reduce organisational costs, promoting awareness and accountability for cost management across all levels of the organisation, ensuring that product lines and services are evaluated and making appropriate adjustments to maximise return on investments, and integrating sustainable practices into strategy and operations to enhance revenue through improved brand reputation.
Risk management and scenario planning
Business leaders value certainty, but the past four years have brought significant change. Management accountants have been at the forefront of disruption, guiding their organisations through a global pandemic, geopolitical tensions, and economic volatility. The future remains uncertain, which is why organisations need to prepare for different “what if” scenarios across the markets they operate in.
Strategic decision-making
In today’s business world, it’s no stretch to say that data is king. It is the lifeblood of successful businesses, which drives informed decision-making and propels them towards sustainable growth.
Management accountants already possess a comprehensive understanding of business and operating models, but this is now significantly enhanced by more sophisticated analytical tools and access to more information than ever before. This gives management accountants the perfect foundation to offer advice and options at the highest levels of strategic decision-making, significantly enhancing their impact on the overall direction of the organisations they serve.
An organisation’s ability to navigate through crises and their capacity to adapt to constant disruption is the difference between businesses that survives and those that fail. As organisations redefine their business models for an uncertain world and seek new avenues for growth, innovation, and operational efficiency, they will increasingly depend on the expertise of their management accountants to navigate disruption and build agile, resilient, and innovative organisations. In this context, there has never been a better time to be a management accountant.
