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Management Accounting Practices

Added on - 23 Nov 2020

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Management Accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Practices which enhance performance management...................................................................1CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONManagement Accounting ensure preparation of proper reports and accounts of the availableinternal financial and statistical information of the company. This system aids in effectivedecision making, improves and manages the performance of business operations as well.Performance management can be done by adopting sound business strategies, plans such asBudgeting, Financial controls etc. for maximising profit level in a cost effective manner.MAIN BODYPractices which enhance performance management.Performance Management deals with the process of monitoring, evaluating and assessingthe operational efficiency and performance level of the business organisation. By making properuse and management of the business resources helps in sustainable development of the company.Following are the practices which can enhance the performance management in business:1.Budgeting– The term Budgeting is a process which focus is on preparing or creatingprojections, plans and strategies of future expenses and available amount. With the helpof proper budgeting, company can estimates revenue income, plans expenditure amountand restricts spending on area which is not part of the plan. It helps company incomparing the actual outcomes received with the estimated budget prepared to evaluatethe performance level of the company (Lalli, 2012). Thus, budget is a tool which helps inestimating & controlling future income and expense amount for a definite period. It helpsin the proper and effective utilization of the resources available with the company forachieving the over all business goals & objectives in a cost effective manner. It ensuresallocation of money to areas which support the objectives of business organization.2.Financial Controls– The term Financial controls is defined as the processes, procedures,methods, strategies or policies which are used by the company implemented formanaging the flow of finance in the company. Financial controls are considered as themeans by which the financial resources of company are controlled, directed, monitored,and measured. It helps in ensuring the accuracy of report and accounts prepared byeliminating all the errors or fraud done while recording of financial transaction of the1
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