Management Accounting and Reporting: Methods and Benefits

Management Accounting

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Examine management accounting and various kinds of management accounting system. .3
P2) Determine various methods of management accounting reporting .....................................5
TASK 2............................................................................................................................................6
P3) Calculating cost with the help of using suitable methods of cost examination in order to
developing income statement, marginal and absorption costs....................................................6
TASK 3..........................................................................................................................................10
P4) Examine the advantages and disadvantage of different types of planning tools which are
used in budgetary control..........................................................................................................10
TASK 4 ......................................................................................................................................12
P5) Comparison between how enterprises are adapting management accounting system in
order to effectively solve the financial problem.......................................................................12
CONCLUSION ..................................................................................................................14
REFRENCES.................................................................................................................................16

INTRODUCTION
Management accounting is very important for organisation that help to run smoothly. It is
define to identify the information and resources and these are used to analyse to make strategies
that help company to make plan, take decision and performance of management. The main aim
of management accounting to take knowledge about the income and expenses which help for the
growth and development. Pearl Chartered Accountant of UK has to advice Connect catering
services of management accounting with different kinds with reporting. It is also necessary to
maintain management accounting report so that all details are recorded according to different
department so that it is kept in a proper way (Ahmadian and et. al., 2016). However, these
includes performance, accounts receivable, inventory and budget report, that help accounting
firm solve the problem of their clients. The financial problem can be there in organisation, so it
is important to take measure at right time to overcome the hindrances. In other words, financial
accounting differ from management accounting as they it is used for internal users of company
and financial accounting is used by external stakeholders. They are written on document in
structure or step by step form so that management can take decision in appropriate manner.
TASK 1
P1) Examine management accounting and various kinds of management accounting system
Management accounting is a process where information and resources are provided to
managers during decision making. It is sometimes also known as managerial accounting which
means identify, analysing and communicate whereas this accounting is used by internal
employees of organisation that's why it differ from financial accounting. The main aim is to use
data and interpret to make decision effectively (Charifzadeh and et. al., 2017). In this accounting,
financial information and statement is shared to employees of organisation so it control business
and development. Management accounting only select relevant data from different records
which is useful for organisation. In reference to, Pearl chartered Accountant they can advice to
new client Connect Catering services that management accounting will helpful to keep daily
records as this help to maintain trading, profit and loss and balance sheet. This will benefit client
to take short term and long term decision correctly in order to sale product, analysis etc. There
are different kinds of management accounting which are discussed:-

Inventory management system:- This system deals to monitor or supervise asset and stock of
organisation, these will help to analyse the units available that will be advantage for
company. The management accounting system uses EOQ, JIT approach and ABC analysis
to manage inventory. For effective flow of inventory they can use this method in
organisation at the time of sale. The importance is that it reduces the cost and proper
management of stock and eliminate resource which is not useful.
Job costing system:- This management system to identify need of product to be manufactured,
quality to be produced and at which time. In context to Pearl chartered accountant can
advice to their client to track on products (Drury, 2018). This costing consist of procedure
first to receive enquiry about product from customers, price, received the order, order is
being processed, cost record and in final report is given to accountant. The advantage is to
find customer need and demand for goods and analyse cost for them.
Price optimising system:- It is used to identify and control prices of products and decide the
price of different products on time because this will help when there is fluctuation in
demand at various situation. This can be use by client for their customers to set prices
according to segment at different price level such as initial, discount and for promotional
pricing. The importance of system for company to observe adequate price for products in
market.
Cost accounting system:- This management system is used to estimate price of goods or
services that benefit company to make profit, cost and inventory control. Cost accounting
system include process costing and job order costing. For correct estimate of cost of goods
there should be participation and coordination of executives whereas it is easy to understand
requirements of customers and company.
As we discuss above help the Connect Catering services as they are small or medium
enterprises to take effective decision and earn revenue or enhance competition in the market
(Joshi and et. al., 2016) (Kimmel and et. al., 2018)(Maas and et. al., 2016)(Maelah and et. al.,
2018). It provides information in regard to resources and data available to internal management
to pan accordingly so they can determine appropriate price of product. Therefore, this will help
them to develop their business in catering services.