What Is Strategic Management Accounting?

by Jennifer VanBaren; Updated September 26, 2017
Strategic management accounting focuses on strategies to enhance a company's profitability.

Strategic management accounting is a type of accounting that focuses not only on internal factors of a company, but factors that are external. This includes industry-wide financials, averages and upcoming trends.

Strategy

Strategic management accounting makes and implements strategies to increase a business’s profitability.

Costs

Strategic management accounting takes an interest in the costs of goods made. Costs such as overhead and raw material are examples of internal factors strategic management accountants use.

Prices

Strategic accounting studies the industry prices on goods in order to help find a good selling price for the goods a company manufactures. For example, lowering a price of a product from $2.00 to $1.95 may actually increase total profit by increasing the quantity of products sold.

Trends

Strategic management accountants study trends so they can forecast what goods consumers will demand in the future. For example, a strategic management accountant for a shoe manufacturer will study other shoe companies to determine the latest styles and colors.

Planning

Strategic management accountants compile this external and internal information to determine a plan for the company. They recommend certain products to be made, and help the company carry out the plans they have created.

About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

Photo Credits

  • Young business man and woman at office image by dimis from Fotolia.com