Management Accounting: Types of Systems, Reporting Methods, and Planning Tools

Management Accounting

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Various types of MA system and essential requirement..................................................3
P2. Different methods of reporting used in management accounting....................................5
M1. Benefits of management accounting systems and its applications.................................6
D1. Evaluation of MA systems and reporting linked with organizational process................6
TASK 2............................................................................................................................................6
P3. Costing methods to prepare income statement and detect net profit................................6
M2. Range of MA techniques and appropriate financial report...........................................11
D2. Produce a report that applies business operations correctly and interpretation.............12
TASK 3..........................................................................................................................................12
P4. Advantages and disadvantages of different types of planning tools..............................12
M3. Use of different planning tools and their application for preparing and forecasting
budgets..................................................................................................................................13
TASK 4..........................................................................................................................................14
P5. Comparison of companies in using of MAS to solve and responds to their financial
problems...............................................................................................................................14
M4. MA can lead organisations to sustainable success........................................................15
D3. Planning tools used appropriately to solving financial problems..................................16
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
MA is a discipline that involves involvement in policy taking, creation of success
assessment and management systems, including financial reporting and monitoring tools that
better monitor the organization's plan in the design and execution (Arnaboldi, Lapsley and
Steccolini 2015). The firm requires many other MA concepts to help manager decision-makers
achieve business objectives. In order to compile corporate accounting analyses, databases and
books, the company expense and activities are assessed. This study is focused on IKEA, a
Swedish-based, Netherlands-based, international company that produced and marketed entirely
ready-made furniture in 1943. It contains kitchen equipment, household products, goods &
services each time at household.
This report covers important requirements of different MA systems and reports. The report
provides an evaluation of the application of integrated budget preparation planning tools as well
as an evaluation of how the issue is quantified using such management techniques and financial
accounting. It also requires at least 2 examples to begin by contrasting the adaptation of
MA systems by organisations to deal with their financial challenges.
TASK 1
P1. Various types of MA system and essential requirement.
MA, during an organizational context, looks at operations somewhere like a corporation
while taking into consideration of customer needs. The MA method converts these assessments
and details into a vocabulary used eventually to make decision-making better. Management
accounting is a process where provisions of accounting information are used by managers for
deciding matters in their organisations and managing as well as controlling the crucial
operations. The major difference between accounting and finance is the internally or externally
priority (Cooper, 2017). In order to increase operational performance, managers of IKEA
implement MA system and maximize their outcome.
Essential requirement of management accounting systems:
Inventory management system: It’s a tool that enables companies to measure goods
throughout their supply chain. It maximizes the completeness of order placement with the
supplier to fulfil your customer and framework the whole path of even a manufacturing
company. This software offers responsibility and greatly influences an enterprise. Through

reliably tracking goods, companies may reduce data duplication, detect trends and focus on
better spending (Inventory Management Systems, 2020). Whenever company’s inventory is
being ordered, stored and used the whole process called inventory management. Management of
components and raw materials are included. Inventory management plays main role and it’s a
variable asset of the company. Inventory management helps to keep restock certain items and to
decide amounts of products of purchasing and selling and re ordering and tracking of stock and
determining the reorder points as well. IKEA’s Manager incorporates the way to measure the
accessibility of inventory in storage facilities on a frequent basis. It allows them to produce
furniture appropriately or to produce additional inventories as needed. In the sense of the
enterprise, additional managers may develop successful plans in order to operate their company
effectively.
Cost accounting system: This method is used by producers to monitor manufacturing processes
using an on-going inventory program. In these other words, it was an accounting method
developed for manufacturing firms that monitors the movement of goods across the various
phases of development and measures each company’s costs at various speeds (Fleischman and
Parker, 2017). The accurate cost of products is essential to productive products. An IKEA
manager must know which line of products is profited and which are not profitable, but can only
be reached if the appropriate product cost is predicted. Cost accounting is a thing which
determines cost in corporate or business the basic process of cost accounting is to establish
budgets and essential cost requirements of corporation and essential budget management. Cost
accounting helps in future data management of a business and details of efficiency of each data
process in case when a corporation increase and decrease any business prices or fix any price this
process also called cost accounting. Furthermore, IKEA management can develop strategies to
minimize or control costs over the entire operation period.
Price management program: The organization is using this tool as it is conscious that its
current clients are prone to demand variability. The degree to which businesses will achieve
established efficiency and productivity can also be addressed. Optimal level costing is essential
when IKEA try to communicate sales revenues and, more importantly, if it helped to improve
profits through the maintenance of the same customer satisfaction levels. Price optimization is
now becoming extremely important because of extremely competitive purchases in specific
business areas (Gray, 2015). So many firms in market emerging markets also seek to launch new