Question

How customer expectations has influenced management accounting in a modern organisation.

Answer 1

Customer satisfaction has forever been considered as a crucial milestone in the journey towards profitability of business concerns. Though it is widely acknowledged that satisfaction of the customers lead to greater and much more stable revenues, the relationship between customer satisfaction levels and preferences and the company costs incurred in producing and delivering those customer services has received way far lesser attention, and aldo, the results of research undertaken vary significantly across various sectors in the industry. There seems to be less guidance for linking costs incurred by a company to the major elements that are involved in providing the customers with the needed satisfaction in services procured by them, thereby reducing the ability of a company to manage its activities accordingly.

There is a deep connection between customer relationship management and managerial accounting. In today's dynamic environment, we see changes in the definition and functions of both management accounting and customer relationship accounting. In the complex business environment that prevails today, and in the era of such advanced technology and automated production processes, a higher degree of attention must be given to the very orientation towards market and customers. Further, attention should be given to behavior of customers, customer loyalty and customer retention. Entities are required to implement advanced managerial accounting practise, tools and techniques to improve their cost systems, practise profitability and performance and to realize accurate analysis of customer profitability and performance measurement.

Thus, customer expectations has heavily influenced management accounting in a modern organisation.