Management accounting in trade: the process-oriented approach

The expansion of big business, increased competition, sophistication of market mechanisms and production tech- nologies have led to increase in the quality requirements for internal and external information necessary for managerial decision-making. In management accounting, use of the process-oriented approach is considered to be an efficient man- agement instrument aimed at implementation of business strategic and current goals. Elaboration of the author’s interpreta- tion of the “process-oriented approach” and its application in management accounting of trade organizations are the objec- tives of the research presented in this article. The process-oriented approach implies systematic control over the processes identified within the activities of an organization and interacting with each other; the essence of this approach consists in the orientation towards the final results of business processes (BP), evaluated by external and internal users. The basis of the process-oriented approach is a BP as the main object of management accounting, which can also apply elements of budgeting, balanced scorecard (BSC), ABC-method, etc. In management accounting of trade organizations the process- oriented approach allows us to identify conditions and specific characteristics of the set of processes connected with the promotion of goods from producers to final consumers, as well as to evaluate the effectiveness of a BP data with the help of key performance indicators. Thus, in the activity of trade organizations there are three main, one subsidiary and several managerial BP. Budget and a report on its execution are developed for each BP. Besides, in order to ensure an appropriate level of relevance of BP indicators, appropriate grouping and consolidation of the information on the results and expenses on implementation of each trading BP are required. Application of the process-oriented approach of management account- ing provides predictability of the dynamics of distribution costs in the current and long-term periods, reduces the amount of costs deviations in a trade organization from the planned indicators.