TASK 11 P1. Management Accounting Systems and Techniques

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Management accounting and its different types of systems..................................................1
P2. Different methods used for management accounting reports................................................3
M1. Evaluation of various benefits of management accounting systems....................................4
D1. Management accounting reports and management accounting systems are integrated
within organisational processes...................................................................................................6
TASK2 ............................................................................................................................................6
P3 .Appropriate techniques of cost analysis to prepare an income statement.............................6
M2. Management accounting techniques and financial reporting documents.............................9
D2. Financial reports which applies to interpret many business activities..................................9
TASK3...........................................................................................................................................10
P4 Advantage and disadvantage of different planning tools used in budgetary control...........10
M3. Usage of different planning tools and their applications for preparing and forecasting
budgets.......................................................................................................................................12
TASK4...........................................................................................................................................12
P5 Organisations are adapting different management accounting systems to respond the
financial problems......................................................................................................................12
Comparison between Riverside Financial Consultancy Ltd and Bright-star Financial Limited:
....................................................................................................................................................13
M4. Management accounting in response to financial problems can lead organisations
sustainable success.....................................................................................................................14
D3.Various planning tools to resolve financial problems..........................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting is the another name for managerial accounting. Management
accounting is a technique which provides provisions to the managers for the purpose of analysing
the business operations to prepare some of the internal reports (Wilkinson, 2019). Such
techniques are required to prepare the financial statements on the basis of financial and non
financial information available with the managers for the purpose of taking short term along with
long term decisions for the sustainability of the organization. These reports are generated either
on daily basis or as per the demand as major decisions are based on such reports. To understand
the managerial accounting tactics, Riverside Financial Consultancy Ltd is selected. The selected
organization was established in the year 1988 having its headquarters at Hammersmith, London.
Such organization war form to provide financial services to various individuals as well as
business entities in performing the practices related to accounting obligations and tax benefits
(Adler, 2013).
In the project report, detailed information related to management accounting, meaning,
essential requirements of different types, benefits, applications along with methods and
techniques are described. It also includes various budgetary control planning tools with their
advantages and disadvantages as well as the ways in which an organization responds to financial
problems leading towards sustainable success.
TASK 1
P1. Management accounting and its different types of systems.
Accounting: Accounting is a systematic process of recording the financial transactions
related to the operations of the business entity. It includes identification, recording,
measurement, classification, summarization, interpretation and communication of the results in
any organisation. It is done to maintain the complete systematic records of all transactions to
analyse the financial position in the competitive world.
Management accounting: management accounting is the part of accounting. Such
accounting helps in providing information related to costing as well as operating to the senior
managers to take effective decisions for the business entity. It helps in providing the financial as
well as non financial information to formulate the future plans, policies ans strategies for the
success of the business organisation. It provides the managers with the problems associated
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while preparing the financial statements. The main objective of such accounting is to plan,
control and prepare the statements by reducing the cost and maximising efficiency along with
profitability. The Riverside Financial Consultancy Ltd uses the described management
accounting systems to analyse as well as evaluate the informations:
 Inventory management system: Inventory management system is used to monitor and
manage the available inventory with the entity. Such system is used in any organizations
to ascertain the actual information of the stock of raw material, goods in progress and
finished goods lying with them (Arroyo, 2012). Such system is essentially required in
Riverside Financial Consultancy Ltd to track its inventory by monitoring and
implementing various strategies for effectively management of the available stock of
capital with its clients.
 Job costing system: Job costing system is a technique used by top level managers to
optimize and allocate the associated costs of various jobs. such type of accounting system
is used to keep the information of the work done by an individual as well as team
performance. It is required in Riverside Financial Consultancy Ltd to keep a record to
different services provided to different customers in a systematic manner of the
individual projects.
 Cost accounting system: Cost accounting system is a tool used by the managers to
estimate the cots associated with the products for analysis of profitability, valuation of
inventory and controlling various costs. It focuses on the various costs associated with the
production processes in order to find new ways in which they can be reduced to achieve
maximum profits (Bennett, 2017). The essential requirement of such system in the
Riverside Financial Consultancy Ltd is to examine the cost structure as well as to divide
the costs of different commodities with different customers.
 Price optimization system: Price optimization system is a system which provides
framework for effectively determining and optimizing the prices of products in such a
manner to fulfil the objective of the business unit. Such system requires Riverside
Financial Consultancy Ltd to analyse the buying pattern and preferences of the clients
towards different prices of the securities along with investment in order to formulating
policies.
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