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BALANCE SCORECARD AND AS AN ACCOUNTANT IN VALUE

"STRATEGIC PARTNER"

By: Arfan Ikhsan Lubis

Participants of the University of Diponegoro, Master of Science in Accounting

ABSTRACT

The role of accountants has changed. Where they had been using only the traditional functions. With the changing role of accountants, the accountants have entered a new organizational strategy. Meanwhile, the Balanced scorecard as a strategy management system had a relationship with financial instruments and non-financial in the four keys of an organization, it is becoming a tool that is really good. The accountants can use it in soliditi their position as a value of organizational team members.

Key Words: Balanced Scorecard (BSC), Accountant, Strategic Partner

I. INTRODUCTION

In recent years, the role of accountants in the organization has changed dramatically. Dramatic changes here means within the scope of the term "business partner" and "strategic partner" to prioritize the expansion of the role of accountants in their involvement in the organization. The trigger of all this, especially the changes of globalization in the field of end-akhlr business is growing fast. Because multinational firms operate, they expect their financial advisers also have experience in multinational (Editors MA, 2002). Therefore, strategic management accounting is one of the accounting answers for these problems. The use of traditional management accounting for profit maximization and short-term goals, has developed into an approach that focuses on the attainment of a sustainable company. If the traditional management accounting-oriented presentation of information for decision making based on the aspect of accountability, cost control and profit maximization of short-term priority for the company's operational level, strategic management accounting actually develop the scope of accounting to a process of presenting information that is also aimed at changing behavior, not Just for operational level but also a more strategic level of management (Hutagalung, 2002).

With the discovery of the concept of "Balanced Scorecard", then the accounting developments seem faster lately. BSC emphasizes that all financial and non financial measures become part of the information system for workers at all levels of the company. BSC objectives and measures more than a set of specific performance measures of financial and nonfinancial. All objectives and measures are derived from a top-down process driven by the mission and strategic business units. This is the subject of attention needs to be considered, because the scorecard is a conflict between the imperative to build a long-term competitive capabilities with the aim of the immovable from the historical financial cost accounting (Lubis and Sutapa, 2003), this concept is also included in two significant changes from the reporting traditional (Latslaw and Choi, 2002). First, the incorporation of non-financial instruments. Second, the most important changes in align with corporate strategy tool.

In an effort to unite the direction of each of these elements simultaneously, then the balanced scorecard helps top management to communicate their strategies to the organization, and evaluate progress and achievement of organizational strategy. Accountants should embrace the concept of balanced scorecard, and should allow the implementation. If this is done, the accountant can increase their value to an organization and soliditi their position as a value and a member of the management team strategy.

2. PERFORMANCE MEASUREMENT

At companies around the world to reinvent itself for the competition that is based on information, their ability to exploit intangible assets (intangible assets) has become more positive than their ability to invest and manage real assets (physical assets). In the traditional management accounting, performance measurement management based only on financial aspects only, because financial measures are easily obtained in the form of quantitative values derived from the financial statements. While the performance of non-financial performance are ignored because it was considered difficult to measure and have a fairly disturbing weakness is lack of ability to measure intangible assets (intangible assets) and intellectual wealth of human resources (Rahman, 2001).

Some ways are used in traditional management to measure performance of the organization is using the ROI (return on Investment), EVA (Economic Value Added) and others. All measurements are using the financial perspective in the short jengka, perhaps the manager can produce a good performance despite ignoring non-financial, but not for long term. Assessing the performance of the enterprise solely for the financial aspect would be very misleading performance, current financial good so may have to sacrifice / has been created at the expense of long-term interests. Conversely, unfavorable financial current, usual due to the company to invest long-term interests.

3. CHANGES IN THE ROLE OF ACCOUNTANTS

In May 1998, Peter Leitner showed some significant changes to the role of accountants. He says in his article "Beyond the numbers" accounting manager, control, Treasures, and chief financial officer of their organization expects to walk behind the traditional accounting functions, and operation as well korporate strategy. Further evidence of the role of accountants changes occurred in March 1999, when the Institute of Management Accountants (IMA) changed its name to publish "The Management Accountant" to "Strategic Finance". IMA's leaders kiss the failure of management accounting, but the changes needed to expand the role that accountants play in the organization (Latslaw and Choi, 2002). In June 1999, George Deeble said that "the accountant will be able to play an active role in running the company", he said that the most important part of building a successful company has a good internal processes, where one of the accountants to help companies build a good infrastructure. "Possible examples The best of the change in accountants found in the organization indicated in the article "Counting More, Counting Less: Transformation in the Management Accounting Profession". In an article September 1999, which was written Russell, Siegel and Kulesza comparing their response to the organization's accountant from practice IMA's 1999 by analyzing management accounting and accountants from the IMA's practice in 1995. This comparison resulted in several significant changes that occurred in the management accounting profession diving five years. Some of their conclusions are:

* Compared with the Past five years, 70% of respondents felt that people who are outside of the finance function of trust management accountants to bring more value to the organization.
* Accountant who worked in the accounting department, traditionally more than 20% of respondents said that at least half of the management accountant is now operating division that location, where they serve part of a business team.
* More than five years of the Past, there are significant changes in the workplace by management accountants. The results indicate that more time spent on internal consultant, and a lot of criticism activities involved in designing strategic accountants.
* Russell, Siegel, and kulesza concluded that management accountants will become more involved in running a business. In addition, the role of management accountants has been run as "business partners" Manjadi a member of the strategic management team.

Previous statement provides evidence that compares the role of accountants in the expansion of the organization, and accountants increasingly an opportunity to show their abilities and increase their value to the organization as a strategic management team members. However, for some scope, this opportunity may be closed if accountants are not able to capture the moment in it.

In his article Jon Scheuman's in April 1999, "Why Is not the controller Having More Impact", he warned that in many cases that have failed in improving the Controllers executives and operational managers as long as they make plans. Balanced Scorecard can become a kind of tool for accountants who can bring value to the members of the strategic management team.

4. BALANCE SCORECARD

In 1992, Robert Kaplan and David Norton introduced a system tool that they call "The Balanced Scorecard". They say that a lack of management on the organization solely because the use of traditional financial instruments, such as return on investment and earnings pershare. Kaplan and Norton have been aware that different financial measures well in an industrial area. But the output of step with the capacity and competence of companies trying mastered at this point, the high competitive environment faced by the company (Kaplan and Norton, 1992 in Latshaw and Choi, 2002).

Balanced Scorecard consists of an array of traditional financial instruments which indicate that the results of actions already taken, and the goals of operational tools mengindikatorkan on the performance of future financial statements, more importantly, BSC starts with the strategy of the organization's operational goals and objectives established, and tools performance has been developed in line with organizational strategy. Finally, the financial instruments are determined to ensure that the relationship between strategy and performance improvement tools translated into improved financial success.

There are several key issues that needed to highlight the relationships within the Balanced Scorecard. First, the organization's strategy is to point the beginning of the process that enables top management to make in their minds what the company's strategy is what the purpose of completing required based on the strategy. Objectively, the operational activities required to complete objectives, financial and operational tools needed to monitor the operational success, or all done based on the strategy.

4 perspective in the Balanced Scorecard

Balanced Scorecard translates mission and strategy into objectives and measures, which are arranged into four perspective that includes, financial, customer, internal business processes, and learning and growth (Kaplan and Norton, 1992 in Lubis and Sutapa, 2003). Four perspective Scorecard provides a balance between short-term goals and long term, between desired outcomes with the achievement of the drivers of those results, and between hard objective measures with subjective measures are more lenient.

Financial perspective

BSC financial perspective because it still uses the financial measure is very important for the company. Provide clues whether the financial size of the company's strategy, implementation and execution, or do not contribute to the improvement of corporate profits. At the time of measurement in financial companies, then the first thing to do is detect the truth of its industry, whether in the developmental stage of growth, sustain, or harvest (Norton and Kaplan, 1996, Monika; 2000). The third stage has different consequences on the size of the study.

In the financial perspective, the scorecard allows senior executives of each business unit to define not only the size that evaluates companies' long-term success, but also a variety of variables which are considered most important to create and encourage the achievement of long-term goals.

Customer Persfeklif

Companies to identify customers and market segments that will be entered. Market segment is a source of income that will become components of the company financial goals. Customer perspective enables companies to align all sizes an important customer-satisfaction, loyalty, retention, acquisition, and the probability with customers and target market segments. The manager must also recognize what is valued highly by the target segment and choose what value proposition will be given. They can then choose the destination and the size of three groups of attributes, which if satisfactorily enable the company to maintain and expand its business with targeted customers. These three attributes are: attributes of products and services, customer relations and the image and reputation.

Internal Business Process perspective

In perspective, internal business processes, executives identify the critical internal processes that must be controlled properly by the company. This process allows business units to:

a. Provide value propositions that attract and retain customers in targeted market segments, and

b. Meet the high expectations of financial benefits to shareholders.

Perspective of this process reveals two different performance measures are the traditional approach with the BSC approach. Traditional approaches attempt to monitor and improve business processes that exist today. While the BSC approach, integrating various processes of innovation within the internal business process perspective. On display will be drawn below a value chain perspective, internal business processes. Traditional performance measurement systems focus on the process of delivering products and services to the company's current customers. Traditional system used in an attempt to control and improve the current process that can be fed as a short-wave penciptan value. This short wave begins with the receipt of orders of products (services) company and the customer and ends with the surrender to the customer. The Company creates value by manufacture, deliver, and deliver products and services to customers at a cost below the price paid by the customer.

Learning and Growth perspective

This perspective identifies the infrastructure that must be built the company in creating growth and increasing long-term performance. Three main sources of learning and growth resulting from: Person, company systems and procedures. While the main group of workers who are distinguished into 3 (three), namely: satisfaction, and retention products that provide outcome measures of the investment being offered for employees, systems, and alignment of the company. These goals are articulated in the learning and growth perspective of the scorecard. BSC translates the overall vision and strategy for every related set of objectives and measures in a balanced perspective. Scorecard consists of various size companies desired results and also the various processes that will encourage the achievement of the desired future outcome.

In the next perkambangan BSC is not only used to measure organizational performance, but also developed into the core of strategic management system. (Lubis and Sutapa, 2003). More than just a measurement, the BSC is a management system that motivate breakthrough improvements in all critical areas, such as products, processes and customers and market development. There are four strategic management process that combines long-term goals and short-term optimal is:

* Translating the Vision Process. This process helps managers build a consensus vision and strategy.
* Communicating and Linking Process. This process confirms management invites individual and departmental goals, setting goals and linking performance with rewards.
* Business Planning Process. This process allows companies to integrate business and financial planning that includes setting targets, allocating resources, streamlining initiatives and the establishment of strategies, important events.
* Process Feedback and Learning. Articulate the vision, setting up a feedback strategy, facilitate review and learning strategies.

5. TOWARDS A NEW strategic management system

BSC objectives and measures outlined in the vision and strategy of the company, thus improving the management accounting purposes directly related to the company's strategy can be achieved. After assessing the forces that affect competition within an industry and its underlying causes, corporate strategists can identify strengths and weaknesses of the company. Strengths and weaknesses of the most important views from the perspective of the strategic posture of firms is related to the underlying causes of their respective strengths. Where the position of the replacement? To resource barriers to entry?

Then, the strategist can divide a plan of action which can include, 1. Positioning the company so the ability to provide the best defense against competitive forces. 2. Affect the balance of forces through strategic steps to increase the company's position, and 3. Pengantisipasian shift in the factors underlying the strength and response, with the hope of a change of exploitation by the selection of adequate strategies for the new competitive balance before opponents know it. Objectives and performance measurement is looking at companies from four perspective, namely financial, customer, internal business processes and learning and growth. BSC provides a framework of thought to describe the strategy into operational terms. With the objective of a business unit BSC is not only expressed in financial measures, but further elaborated into measuring how these business units create value for existing customers and future and how these units should improve its internal capabilities and investments in people, systems , the procedures needed to obtain better performance in the future.

Many companies apply the concept of balanced scorecard to improve their performance measurement systems. Application of this concept provides clarification, consensus, and focus on an expected improvement in performance. Recently, many companies are expanding their use of the balanced scorecard, which used it as the foundation of literatif integrated strategic management system (Rahman, 2001). Companies using the balanced scorecard to:

* Clarify and update strategy
* Communicate the strategy throughout the company
* Adjust the unit and individual goals with strategy
* Connecting with the long-term targets and annual budgets
* Identification and adjustment of strategic initiatives
* The implementation of periodic performance reviews to learn about and improve strategy.

Possibility of many companies that have used a combination of financial and nonfinancial measures, both in senior management review as well as in dealing with the board of directors. Especially in recent years, with attention to returning customers and quality processes has led many companies trying to obtain and communicate the measures of satisfaction and customer complaints, product and process level errors, and delays in product delivery. Suitable size must be a causal link, as well as the combined outcome measures and performance drivers.

Balanced Scorecard enables a company to adjust its management processes and overall organizational focus on implementing long-term strategy. Without a balanced scorecard, most organizations are not able to achieve consistency of vision and a similar action when they attempt to change direction and introduce new processes and strategies. Mamberikan balanced scorecard framework for the regulation also allows the implementation of strategies other than the strategy itself to evolve in response to changes in the competitive market and environmental technology companies.

6. CLOSING

The use of traditional management accounting for maksimimasi profit and short-term goals, has developed into an approach that focuses on the attainment of a sustainable company. With the discovery of the concept of "Balanced Scorecard", then the accounting developments seem faster lately. BSC emphasizes that all financial and non financial measures become part of the information system for workers at all levels of the company. BSC objectives and measures more than a set of specific performance measures of financial and nonfinancial.

Balanced Scorecard consists of an array of traditional financial instruments which indicate that the results of actions already taken, and the goals of operational tools mengindikatorkan on the performance of future financial statements, more importantly, BSC starts with the strategy of the organization's operational goals and objectives established, and tools performance has been developed in line with organizational strategy. Application of this concept provides clarification, consensus, and focus on an expected improvement in performance. Recently, many companies are expanding their use of the balanced scorecard, which used it as the foundation of literatif integrated strategic management system.