Management Accounting and Budgeting for Softconic

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PART A...........................................................................................................................................1
PART B............................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Management Accounting refers to the use of different types of provisions so as to analyse
and interpret the financial information effectively and efficiently (Fleischman and McLean,
2020). This essay is based on Softconic. It is an IT Company. In this essay detailed discussion
will be made on how it can improve its efficiency and effectiveness by using the provisions of
Management Accounting.
MAIN BODY
PART A
Budgeting refers to the use of different types of budgets so as to make sure that the
organization is able to plan in the correct manner regarding its financial resources. A budget
refers to an estimation of revenues and expenses which is made for a particular period of time
mostly a year (Budget, 2020). This process is quite useful from the point of view of the managers
so that they are able to take the correct decisions which will help the company to attain higher
level of profits. For Softconic it is quite essential that it uses its appropriate techniques for the
purpose of using its financial information in the correct manner.
There are different methods which are used for budgeting. These are as follows-
Incremental Budgeting- In this type of budgeting, the focus is put by the organizations on
preparing budgets by adding to the already existing values (Horton and de Araujo Wanderley,
2018). Thus Softconic can use it so that it is able to prepare a budget effectively.
Activity-based budgeting- In it, the organizations make their focus on the different types of
activities which are required for the purpose of conversion of the inputs into outputs. In the
context of Softconic it has to be made sure that it is able to use the right system so that it can
convert the inputs into outputs to achieve efficiency.
Value proposition budgeting- This type of budgeting makes sure that everything which
provides value to the businesses is included in the budget. For Softconic it offers an opportunity
to make sure that the right methods are used so that the organization is able to achieve its goals
and objectives.
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