Management Accounting: Introduction, MA, Financial Information, Benefits, Integration, Techniques, Budgets, Planning Tools, Comparison, Solving Financial Problems

This presentation provides an overview of management accounting, including its introduction, the role of management accounting in organizations, presenting financial information, benefits of management accounting systems, integration of systems and reports, microeconomic techniques, using budgets for planning and control, the use of planning tools, comparison of organizations, and solving financial problems. It also includes references for further reading. Get study material and solved assignments on management accounting at Desklib.

Management Accounting

 Introduction
 Introduction of MA
 Presenting financial information
 Benefits of system
 Integration of system and reports in organizational procedure
 Micro economic techniques
 Using budgets for planning and control
 Use of different planning tools
 Comparison of organisation to solve financial problem
 Solving financial problem to lead sustainable success
 Conclusion
Table of Content

Management accounting is defining as the combination of reports and
accounts in which mention all the cost and price of business
activities. To understand the concept of the report selected
organisation Prime furniture which is a growing East London based
organisation. The company planning about the start training course
for the new trainee so for this prepares report in which mention all
the necessary information.
INTRODUCTION

Management accounting: Accounting for management is the inner task
of every organization, which plays a crucial role in every sector. It
seems to get essential business-related knowledge, and increase
profits. The corporation's executives prepares various kinds of reports
that provide complete details and offer suggestions about what needs
to be done in order to efficiently operate a business. Management
accounting basically aims to understand, supervise and analyze the
complex data used only to make the much more suitable business
organization decisions.
Introduction to MA

Cost Accounting system: As per the name given to this system
specifies the costs of the various goods and services offered by the
companies.
Price optimization system: It explains the prices that help achieve the
specific goals including such income value creation.
Job costing system: Job costing is a method for allocating and
collecting the production costs of a single product device.
Inventory management system: It is an accounting method that helps
to better control the stocks and manage all the operational activities
in systematic manner
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The management accounting reports are the result of the organization's
results reflecting the expectations of both internally and externally
administrators. Such accountability plans are published using
various accounting practices which help to define the organization's
productivity condition. Most of these reports are used to schedule,
control, assess success and make the right decisions that will be
profitable for retailers and society.
Presenting Financial Information

Budget Report: It can be described as some type of report involving the
provision of actual and standard revenue, expense data.
Cost managerial Report: All types of business entities are preparing this
report to understand the price of the institution, and to enhance the
profitability.
Inventory cost report: This is the most requested document written by the
institution's president.
Accounts Receivable report: This is a kind of report that relates to
presenting details from different debtors on the total recoverable sum.
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 Cost accounting system: : Calculating the expense of production and
obtaining estimate of existing month revenue is helpful.
 Price optimization system: : It is helpful to maximize company's
product costs that determine however much budget is required by
resolving costs to raise income
 Inventory management system: This management system is
important for keeping monitor of stock and availability for products
and services as per requirement
Benefits of MA Systems

Management accounting system and reports interconnected in
organizational procedure such as stock management system are
useful for monitoring stocks that contains guidance via stock reports
being utilized to maintain stock management and market control
systems beneficial in knowing pricing via budget reports or work
reports that are being used to control the rates of the professional.
Integration of MA systems and reports in organizational
procedure

 Cost: In order to make a purchase, cost is the cash payment a
corporation has expended to manufacture it.
 Cost volume profit: The Cost-Volume-Profit (CVP) analysis is
utilized to evaluate how expense and production adjustments impact
the net revenue and net profits of a business
 Absorption costing: This is another costing method that is used to
develop up a full production costs along with actual expenses and the
percentage of overhead expenses that describe institution profit levels.
Micro Economic Techniques

 Marginal costing: This is a costing method that includes variable
and fixed costs which are measured in units and time to assess the
cost can be computed and in amounts. Variable compensation
related to those costs that may alter after such a transition in
production where they stay constant as operating expenses to
measure income. This approach can be used by any company to
achieve the same income by specifying fixed costs and variable
costs.
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 Budget: The budget relates to organizational process financial
management for a given time frame. It consists of scheduled sales
volumes and earnings, commodity amounts, costs and expenses,
assets, liabilities and flow of cash etc.
 Budgetary Control: Budgetary control pertains to how much the
supervisors use expenditures in a specific accounting period to
regulate as well as manage costs and operational environments
Using budgets for planning and
control

 Capital Budget: Capital budgeting is the procedure which a company
maintains to determine possible bigger projects or expenditure.
Descriptions of ventures that will involve capital budgeting before
they can be accepted or denied include the development of new
factory or a major expenditure outer or in the company. When
portion of capital budgeting, Prime Furniture must calculate the
potential inflows and outflows of cash of a mentioned location to
evaluate if the future profits that will be produced constitute a
reasonable target criterion.
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 Operating budget: An operating budget is an estimation of the
predict revenues and expenditures over one or more
potential periods. The executive team usually formulates an
operating budget just before the start of every year, which displays
planned functions of the business for the whole year. A variety of
subordinate budgets can help this budget and includes data at a much
more simple stage. There may be recognize different expenditures,
for instance, covering salaries, the value of products sold and stocks.
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 Different types of planning tools are using by the Prime
Furniture to developing and estimating of the expenditure
plan. These are helping the business to estimate the total
income and expenditure at arise in the future and impact on
the business activities in direct manner.
Use of Planning tools

 Cash flow challenge: The Prime furniture business faces an unprecedented
financial problem as it has less investment activity that involves selling and
purchasing fixed assets. It is important to sell the capital assets to solve this
issue, which will improve the capital injection than the output.
 Spending more than earning: The Prime furniture faces other money issue
which is its expenditure is greater than revenue. This spends additional
capital in the infrastructure plan with a low productivity resulting in having a
budget. To solve this issue, company wants to establish a strategy that tends
to determine how much expenditure requires to be made in specific projects.
Comparison of
organisations

 Management tool: To identify different financial problems require
applying different management tool such as:
 Benchmarking: It is a strategy used to compete with various
organizations by determining the effective strategic strengths.
 KPI: It is the primary performance metric used to measure the
efficiency of a workplace-worked company and workers.
 Financial Governance: Prime furniture company will solve the
monetary problems and to make government-formed rules and
regulations
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Managerial accounting program including such Benchmarking and
KPI is beneficial to both the organization's development and
contributes to organizational progress as director of the Prime
Furniture business uses KPI to assess the efficiency that will
ultimately steer the entire organizational cost reduction via the
utilize of cost accounting method. In addition, it can compete with
other companies by implementing the Benchmarking and can
enhance the efficiency that will contribute to success of a business.
Solving financial problem

Each organization uses a variety of preparation tools that helps to
provide an effective response to money problems and encourages the
organization to solve financial difficulties. The Prime furniture will
submit budget reports, inventory reports and managerial accounting
documents because it will include a detailed and reliable cost estimate
that might happen within the company. And if managers consider that
overlay analysis can be addressed by implementing the study and
estimating cost amounts that will contribute to the improvement
results.
Planning Tools for accounting
help

It was inferred according to the above report that Managerial
Accounting is the method of defining, evaluating, documenting and
displaying the financial data used only to make successful decisions
by reflecting on the expense and productivity of the business.
Accounting system is useful for the collection of financial and non -
financial details that may be essential to the company for successful
decision making. This study dealt with multiple threads including
such management accounting and its method, methods for budgets
and management issues that arose throughout business dealings.
Conclusion

 Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating
corporate sustainability assessment, management accounting,
control, and reporting. Journal of Cleaner Production. 136. pp.237-
248.
 Mahesha, V. and Akash, S. B., 2013. Management Accounting
Benefits: ERP Environment. SCMS Journal of Indian Management.
10(3).
References