Accounting for Operational Efficiencies

Running head: ACCOUNTING FOR OPERATIONAL EFFICIENCIES
Accounting for Operational Efficiencies
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1ACCOUNTING FOR OPERATIONAL EFFICIENCIES
Executive Summary:
The report has concentrated mainly on dealing with the various accounting aspects in relation to
operational efficiencies. It has been evaluated that involving the stakeholders is the vision for
any business organisation; however, its execution and success relies on the enthusiasm of the
stakeholders. Hence, the organisations are required to ask for the needs of the stakeholders. By
communicating with the customers, it becomes possible for the business organisations to identify
if they are provided with something that is not required by them. For instance, the costly same
day delivery alternative offered is not essential or there is need to improve packaging. Thus, the
customers are the best option in identifying the parts of services significant to them and the areas
that are surplus to them. Finally, cost-volume profit equation is used for analysing the ways the
changes in cost and volume impact operating income and net income of the organisation. It is
useful in determining the contribution margin and contribution margin ratio.

2ACCOUNTING FOR OPERATIONAL EFFICIENCIES
Table of Contents
Introduction:....................................................................................................................................4
Task 1: Maintaining relationships with stakeholders......................................................................5
1.1 Identification of internal and external stakeholders and their roles in reporting
organisational accountability and transparency:..........................................................................5
1.2 Plan to maintain effective relationships with internal and external stakeholders and factors
contributing to maintain effective relationships:.........................................................................7
1.3 Application of theories to maintain professional relationships with internal and external
stakeholders:................................................................................................................................9
Task 2: Management of operational processes..............................................................................10
2.1 Identification of five areas where cost is involved in operational efficiencies and impact of
these areas on the costs of the business:....................................................................................10
2.2 Identification of six ways to manage business expenses and minimise costs:....................12
2.3 Evaluation of the procedure through which activity-based costing strategy leverages off
operational efficiencies:.............................................................................................................15
2.4 Suggestion of five ways of controlling costs:......................................................................16
Task 3: Cost-volume analysis for decision making and planning for operational efficiency.......18
3.1 Profit equation:....................................................................................................................18
3.2 Contribution margin in cost-volume-profit analysis:..........................................................18
3.3 Break-even point:.................................................................................................................19

3ACCOUNTING FOR OPERATIONAL EFFICIENCIES
3.4 Cost-volume-profit equation:...............................................................................................20
3.5 Break-even point for the product using Snowboard Company scenarios:..........................20
3.6 Illustration of the break-even point by using graphical representation:..............................21
3.7 Contribution margin and break-even point for the product using Snowboard Company
scenario:.....................................................................................................................................21
3.8 Units to be sold by the Snowboard Company for achieving a profit of $30,000:...............22
Conclusion:....................................................................................................................................22
References:....................................................................................................................................23

4ACCOUNTING FOR OPERATIONAL EFFICIENCIES
Introduction:
Operational efficiency is the backbone of all financial, industrial, institutional or
commercial undertaking. In different economic sectors, operational efficiency is deemed to be
gauged for accomplishing strong long lasting and growth-oriented outcomes (Otley, 2016). If an
organisation is enabling to make profits, the invested capital is eroded and with the passage of
time, the organisation ceases to exist. The organisation could accomplish increased profit
margins or become more successful in highly competitive markets. This is valuable for the
different groups like management, bondholders, shareholders, financial institutions, bankers,
investors and government organisations.
The first section of the report would focus on maintaining effective relationships with the
stakeholders from the perspective of the business organisations. This includes identifying the key
stakeholders, plan to maintain relationship with the same and application of theories to maintain
professional relationships with the internal and external stakeholders. The next section would
involve evaluation of the management of operational processes, in which emphasis would be
placed on identification of cost areas, techniques to manage business expenses, role of activity-
based costing in leveraging off operational deficiencies and methods to control cost. Finally, the
report would shed light on cost-volume-profit analysis for undertaking decisions along with
planning for operational efficiency.

5ACCOUNTING FOR OPERATIONAL EFFICIENCIES
Task 1: Maintaining relationships with stakeholders
1.1 Identification of internal and external stakeholders and their roles in reporting
organisational accountability and transparency:
There are two types of stakeholders in any business organisation, which include internal
and external stakeholders. The two internal stakeholders that play a significant role in reporting
organisational accountability and transparency include the following:
Management:
The management of an organisation develops and maintains a structure, which acts as the
key in enhancing organisational production and efficiency (Bourne, 2016). For this task, the
managers are involved in developing and reviewing organisational structure. This includes the
formulation of an organisational chart outlining horizontal and vertical reporting relationships
with the business. In addition, it takes into account the outside interactions between the company
staffs, customers and business partners. With the assistance of structured business, it becomes
possible to avoid work redundancy, enhance overall communication along with assuring
maximum utilisation of available resources, opportunities and strengths by maintaining
transparency and accountability in the workplace (Wolf, 2014).
Employees:
The employees of business organisations rely on the business for their livelihood. The
daily work of the employees helps the organisations to achieve success. Hence, it is imperative to
train the staff for enhancing their skills along with preparing them to move into advanced
positions with business growth (Bosse & Coughlan, 2016). In addition, the maintenance of
productive and positive work environment relies on the cooperation of the staffs. The managers