Books on management accounting? Is it even possible to like such titles? For me, the answer is tricky because I’ve never been a cost accountant, and I’m more of an FP&A person than a managerial accountant. Yet there are three titles that are uniquely informative and impressionable on this complex discipline.
Throughput Economics
I wish I had this title when I was auditing manufacturing facilities and their cost accountants early in my career. If you like Goldratt, this newer title belongs on your bookshelf. I should probably point out that one of the authors sent me a copy. Doesn’t matter, I would like it anyway.
Demand-Driven Performance Using Smart Metrics
Most of us who took cost accounting classes in the 1980s remember Charles T. Horngren. With all due respect to this gifted American accountant, I wish this would have been our text for my second class in cost accounting. One word – outstanding.
I also recommend Debra and Chad’s videos on their website.
Real Numbers: Management Accounting in a Lean Organization
I had Jean Cunningham, the author, on the podcast in 2021, and the interview was one of my favorites. Jean is retired from corporate and operational accounting, but I hope her message is heard for years to come. I also recommend The Lean Turnaround by Art Byrne after you read Jean’s book.
Managing For Results – Chapter 3
Peter Drucker was not a cost accountant. But he could have been a great professor teaching young accountants about misusing overhead allocations for costing individual products. Drucker was ahead of his time and wrote this chapter before lean planning, reporting, and analysis existed. While Art Bryne’s book is easier to read than Drucker’s, i still believe every financially-minded CEO should study the chapter in this book.
Management Accounting Book Prerequisites
My first exposure to good books on cost accounting hit the topic indirectly. The Machine That Changed the World bent my mind early in my career. Yet, it’s not a cost accounting book, but every FP&A and managerial accountant should read it. Taichi Ohno’s Workplace Management belongs in this category too.
The books above do not require any prerequisite reading. However, the titles below prepared my mind for the titles above which are newer:
- The Goal – in 1992, this was a mindset book. It still is. The concepts are sticky and relevant. This is the book my fellow classmates should have been reading in our cost accounting courses in college.
- Relevance Lost was one of the first five business books I read as I was starting my career. At the time, the concepts were profound, moving, and radically different from my studies in accounting and what I had learned at KPMG. You’ll need to find a used copy.
- What did CEOs read before 2000 when books were sparse on topics such as these. IBM used to teach every manager the Mobley Matrix which I still find fascinating even through the math behind ROE is limiting when using a GAAP framework. Beyond IBM is an obscure and forgotten book, but the two chapters on the Mobley Matrix are useful for someone trying to understand more complex management reporting. When this book was published in 1989, I cannot think of any similar titles that taught CEOs basic manegerial reporting in a layperson’s language.
Nearly-Relevant Management Accounting Titles
Profit Beyond Measure could easily be placed on the list above, but I just read it a few years ago. The book is by the same author as Relevance Lost.
Why is Don Wheeler on this list? He just has to. One of the jobs of management accounting is to help senior leadership teams make better decisions. Wheeler’s, Understanding Variation includes a tool that is simple yet powerful when working on any improvement-related project.
When reading Wheeler, we need to talk about Deming too. I’d either start with The New Economics or Mary Walton’s, The Deming Management Method.
The last book in this category has the catchiest title, and it’s a book I recommend to all accountants – I May Be Wrong, But I Doubt It by Douglas Hicks. I love this book, a collection of short essays on accounting and cost accounting topics.
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Deming isn’t understandable without Mary Walton’s book….with the exception being the “Parable of the Beads.”
Yes, that’s why Mary is on this list. We’ve mentioned it frequently on the show … Deming was an outstanding technical writer, but for grabbing and keeping the attention of people like me in a narrative manner, well, it wasn’t his gift. He also had a ghostwriter at some points in his career. One of the kindest hearts we’ll ever meet, Kate McKeown was one of those ghostwriters. I think she worked for him for around ten years.