Management Accounting Systems and Reporting Methods

MANAGEMENT
ACCOUNTING

Management Accounting
Systems and Reporting
Methods The focus of the financial accounting is preparation of the
information for the external parties such as lenders, public
regulators as well as stockholders that is according to the
generally accepted accounting principles.
 However, managerial accounting takes the financial information
of the company and then it develops reports for the confidential
use by the managers. These are the reports that aids for making
decisions as well as it identifies the ways for running the
company much efficiently (Otley 2016).
 The reports prepared are based on informational needs of the
management as well as it includes budgeting, cost analysis of
product, breakeven charts, trend charts and forecasting.

Continued...
 Management accountants are generally considered to be forward-looking and they uses
the reports for helping to make the decisions, which affects organization’s future rather
than historical based recording as well as aspects of compliance in the financial
accounting. The trend lines are used for forecasting the sales and preparing the budgets.
 It identifies actual direct cost as well as cash flow and profits of the products and
services. Under this, management can determine whether the products or services are
profitable or not and the volume and prices of sales required for the break even.
 The performance reports are used by the executives that is also referred as variance
analysis from the managerial accounting for identifying the deviations of the actual
results from the costs that are projected.
 Managerial accounting has the benefit of analyzing the workflow in the process of
production or the activities in the process of sales.
 Information systems is designed by the managerial accountants for providing the data
for running their business effectively and reaching to their goals. These are the internal
repots constructed for meeting the specific needs of the company as well as their
mangers (Bobryshev
et al. 2014).

Methods of Reporting
 Budgeting Reports: This sets out the planning for analyzing the
performance of company for making the evaluation of the
department of the performance as well as controlling costs.
 Accounts Receivable Aging Reports: It is concerned with the
management of the accounts receivables for the companies that
are engaged for extending credit for the customers.
 Job Cost Reports: It is concerned with identification of costs,
profitability and expenses of each of the specific job.