Activity-based techniques and the death of the beancounter

Abstract

In a study of eleven medium and large sized companies we found clear evidence that management accountants were seen by operational managers as ‘beancounters’. This term has become common in the literature in recent years and we define a beancounter as, ‘an accountant who produces financial information which is regarded as of little use in efficiently running the business and, as a result, its production has become an end in itself.’ Furthermore many management accountants recognized this image. All of the companies had attempted to implement activity-based techniques and this process had led to a substantial improvement in the beancounter image. We propose three scenarios for the future of activity-based techniques and the management accountants' image as a beancounter. These are based on our understanding of the history of management accounting and trends that have been visible in recent years. Further we suggest the most likely contingent variables which may lead to one or other of the scenarios becoming reality. Some of the scenarios are more likely to occur in the short or medium term, whereas others are long term possibilities. We conclude with our own view on the likely future for activity-based techniques, suggesting that there is a promising future for these techniques in the medium term.