(Solution) Financial Accounting - Assignment
Added on 2021-02-20
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Financial Accounting
TABLE OF CONTENTSINTRODUCTION...............................................................................................................1Critically evaluating the use of the management accounting tools in enhancing thefinancial performance ....................................................................................................1CONCLUSION...................................................................................................................4REFERENCES..................................................................................................................5
INTRODUCTIONFinancial accounting means the process that keeps the track on the financialtransactions of an organization. Under this, standardized guidelines are been used forrecording, presenting and summarizing the transactions in order to report the financialstatement to the internal and the external users so that they could be able to make thesuitable decisions in relation to their investment and stake. The financial reportformulated reflects the performance and the position of the company in the market bycommunicating the information in relation to its profitability, assets, liabilities andequities. The present report is based on the uses of the several managementaccounting techniques in getting better financial results or in improving the financialperformance of the enterprise. Critically evaluating the use of the management accounting tools in enhancing thefinancial performance According to Cooper, Ezzamel and Qu, (2017), it has been viewed that, Forattaining customer satisfaction and customer loyalty for the organization, Managersmust make use of the management accounting techniques such as balanced scorecard,just-in-time, total quality management, break-even analysis, six sigma etc (Nguyen andet.al., 2017). These techniques will be enabling the managers in gaining sustainableperformance within the company which in turn helps in improving the performance of theemployees and in reaching the competitive edge over competitors within the overallmarket across the world. In order to match with the market trend, it is important for the managers to adoptBalanced Scorecard tool which could help the organization in meeting with the changingbusiness needs and in resolving its financial problems (Parida and et.al., 2015).Balanced scorecard is the method that facilitates comprehensive and the balancedframework in order to judge the performance of an organization by taking intoconsideration four major perspectives that is financial, customer, production processand the growth outcome (Chen, Hsu and Tzeng, 2011). It helps the management infunctioning the company in the unique way. This technique assist managers inenhancing the performance by setting up of the objectives aChen, Hsu and Tzeng,2011nd the measures for the performance in relation to the perspectives. However,1
considering the overall performance of an organization only with regards to the fourperspectives is a vague concept as there are more areas which need to be focusedwhile taking measures for improving performance like competitors analysis,environmental scanning etc (Lisi, 2015). Balanced scorecard is a major mediumthrough which the financial problems could be resolved in relation to raising of funds,meeting uncertain event and scarcity of resources for an entity. (Source: Balanced Scorecard Basics, 2019)O’Neill, Sohal and Teng (2016) also reviewed that, using the just-in-time method,company could be able to increase efficiency, decrease wastage and ensure reductionof cost (Grigoroudis, Orfanoudaki and Zopounidis, 2012). It is the managementaccounting technique which enables the organization in gaining improved cash flow andlowering the holding cost with proper inventory management. ItChen, Hsu and Tzeng,2011 also provides for optimum use of the resources which in turn leads to less wastageand higher profitability for the business (Kurdve and et.al., 2015). Thus, this techniquemight help the organization in achieving sustainable success in respect of inventory or2
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