Engineering and cost accountancy subject are interconnected subjects. In some of the Engineering colleges when doing engineering the subject with the name engineering economics is part of studies. To plan the human resource management and materials management there is a knowledge requirement about understanding the labor cost and depreciation. As engineers place themselves in the top management with involvement over decision making they need to know about accounting for engineers. IIT digital skill academy offers accounting courses for students with 12th standard pass. Engineers get problem-solving skills with accounting certificates. This blog revolves around the growth of engineers with an accountancy qualification. ICMAI offers a CMA course that helps for the growth of the engineers in the organizations. Let me validate the discussion with valid points such as exemptions in CMA for engineers, promotions offered to engineers after completing the CMA course and how the job of engineers become easy with cost accountancy.
Exemptions for engineering students
Engineering students can get into the direct route and avoid doing foundation course like B.com students. They are exempted from 100 hours of computer training. Apart from this, they get an exemption for two subjects at the intermediate level. The subjects are law and ethics and operations management and strategic management. The exemption application form to be sent to the Director of studies. All engineering graduates like civil engineers, biotechnology, electrical engineering, leather technology, marine engineering, mechanical and industrial engineering; textile engineering and instrumentation engineering are eligible to do the ICMAI course. There is a requirement from these streams to understand cost and management accounting.
Job nature of engineers
The job of an engineer requires science and mathematics which deals with solving the problems with the product. Engineers produce new products, maintain the current product, and implement innovative methods to improve the efficiency of the production. In the field of engineering, there is a requirement for cost and management accountancy as the cost of production and price of the product are decided using cost accountancy. For engineers learning the engineering cost analysis helps for taking better decisions in the organization.
Engineers involved in the commercial projects in MNC companies like maintenance, quality support, cost management, and bidding management. For maintenance engineering statistics and probability help to manage the logistics. Computer knowledge is also essential to organize the availability of equipment and repair the equipment. To manage the complexities in the process of bidding knowledge about uncertainty management is essential. Quality management in the field of engineering revolves around detecting, remediating, and preventing product issues. Quality management is associated with prevention costs, appraisal costs, external failure costs and internal failure costs. Thus the application of cost techniques increases the profitability of the business. This will ultimately result in customer retention. So, maintenance, project management, bidding management, and quality management require cost strategies.
Benefits of cost accountancy for engineers
Engineering has its root in business and international operations. So, cost accounting has an impact on engineering. So, the objective to learn cost accounting for engineering managers improves the following operations in the organization.
- Understand the financial decisions
- Allocate the capital and resources as per the project requirement.
- Understand the competitive market of the current economy.
- When doing purchases the engineer can decide on the options such as make-buy or buy-lease.
- Integrate the financial sensitivity and project requirement.
- Analyze all the costs involved in the production of the product.
- Choose the best inventory plan.
- Decide the cost strategies for plastic, metallic and electronic components.
- Implement cost control strategies with different departments of the company such as engineering, geographic, commercial and marketing.
- It becomes easy to segregate the profitable and unprofitable activities with cost estimation.
- The data analysis with production helps for planning the future policies of the company.
- The reason behind the increase and decrease of profit is known through cost analysis with different products.
- The analysis of material cost imparts control over the supply of materials to various departments.
- In a competitive market, it is essential to find out the optimum level of the selling price of the product.
- The efficiency of machines has an impact on the production capacity. So, different budgets are prepared to analyze the capacity, revenue and profit. It helps for organizing the activities as per the profitability.
Engineering has many specializations and new inventions are dominating the engineering field. So, engineers already involve themselves in learning about new inventions. CMA is the additional qualification for an engineer which promotes them to the higher levels. The job of the engineer is interesting as they learn new things related to their specialization. The top management depends upon cost accountant and industrial engineer. So, learning cost accountancy makes an engineer an efficient manager.