Remember the short term and long term

,

One item that people should be aware of is that management accounting and financial management are similar to the extent that they are both concerned with resource usage. But there are differences.

I was lucky enough to have recently flown on the new Airbus A380 super jumbo and that got me thinking about some of the financial management issues that Airbus face. Designing and producing the A380 must have been a phenomenal exercise and a real testament to man’s engineering skills. It’s capable of carrying over 800 passengers and has a range of nearly 15,000 km. It’s a fantastic machine.

But what has this all got to do with the difference between management accounting and financial management? One difference is that management accounting tends to deal in short-term timescales whereas financial management is generally more concerned with the longer term. Whilst the longer term is generally considered to be more than one year be aware that certain industries and companies have a distinctly longer “long-term”.

From inception to delivery the A380 took nearly 10 years and the long term view taken by Airbus is certainly longer than some businesses in for example the IT or fashion industries. Some of the businesses in these industries have distinctly shorter “long-terms”.

Anyway, despite the millions spent on design and development of the A380 there was one disappointing thing about my flight and that was I fell asleep during the film and missed the ending…

You are (probably) a liar...

Here’s a nice ethical question for you – have you lied recently? My guess is that you have. Now before you get all righteous about[..]

Don't worry, he's ok...

A few years ago if a company wanted to advertise their products they mainly used the traditional media methods of TV, radio and print. Nowadays[..]

There's a 90% chance...

There’s been a significant reduction in the use of cash during the pandemic. A lot of shops now only accept card payments so that they[..]

Start walking...

Do you sit at a desk when you’re at work? If you do, how long do you spend sat there before you get up to[..]

I never emailed you...

Sometimes it’s the simple scams that can cause the most damage. We hear all the time about ignoring scam phishing emails where fraudsters are pretending[..]

Does this help you concentrate?

The Journal of Consumer Research published the results of five experiments into how the level of background noise can impact on performance when someone is[..]