Management Accounting and its Role in Organizational Processes

MANAGEMENT
ACCOUNTING

INTRODUCTION
Management accounting is a field of accounts which benefits in preparation of multiple
reports and accounts so that organisation can attain reliability and productivity while performing
business operations. This will allow a firm to take strategic decisions so that high outcomes can
be achieved (Abdelmoneim Mohamed and Jones, 2014). This assignment is written for KEF Ltd
which is a medium sized manufacturing company which is operating in UK. This report is given
to cover about multiple kind of management accounting systems and reports and their role in
performing organisational processes. Also, different kind of costs will be used to prepare
financial and income statements. With the help of budgetary tools, appropriate budget for firm
will be prepared and forecasted. At last, different techniques will be adopted so that financial
issues of an organisation can be resolved in an efficient manner.
TASK 1
P1 Mention about management accounting and need of different management accounting
systems in an organisation
Management accounting is termed as an activity of analysing, summarizing and
interpreting final statements prepared on annual basis by an organization. These accounts include
income statement, cash flow statement, balance sheet etc. It makes easy for the manager to
identify actual financial position of an organization which motivates them to make corrective
actions for future improvement (AlMaryani and Sadik, 2012).
Price optimization system: It is a system which bring out the information about the actual
perception of customers towards the pricing decisions taken by an organization for their products
and services. Using of such system by KEF Ltd facilitates their manager to recognize the aspects
on the basis of which willingness to buy depends. It makes easy for them to frame an effective
pricing strategies which can bring profitable return to both customers and an organization. Hiring
a researcher to identify the actual satisfaction level of customers will be the most effective
decision of KEF Ltd as it estimates an organization about the effectiveness of their current
pricing policy for their offerings (Bennett and James, 2017).
Inventory management system: This type of system emphasize on maintaining and
managing inventories in a firm so that cost of inventories can be optimised desirably. This
system can be used by organisations to increase their efficiency of inventory management. In
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