Management Accounting: Types, Reporting, and Benefits

This presentation provides an overview of management accounting, including the different types of accounting systems, methods of reporting, and the benefits of using management accounting systems. It also discusses the integration of management accounting systems and reporting with organizational processes.

Management Accounting
PART 1

Covered content
• Introduction
• Various types of management accounting system
• Different types of reporting
• Benefits of using management accounting system
• Critical evaluation of reporting
• Conclusion
• References

Introduction
Management Accounting is important concept which is necessary
to implement by every organisation to attain sustainability in their
operations. It is the process involves preparation of different
accounts which provides timely statistical information to managers
to make short term decisions. In the present report explain about,
Essential requirements of different types of management
accounting systems, different methods of management accounting
reporting.

Various types of accounting system
It is broad concept which includes the provision of cost
accounting also. It includes the preparation of different
accounts which records the information regarding the
functions of different departments. Different accounting
systems are named as Job costing, inventory, cost and
managerial accounting.

Difference between Management and
Financial accounting
Management Accounting
Financial Accounting
Different accounts and reports and
prepared for internal parties
Profit and loss account is prepared
for external parties
The concept of management
accounting is future oriented helps
in forecasting of future actions
These accounts are prepared on the
basis of historical data
Measures both financial and
operational performance of
organisation
Helps in measurement of financial
data

Job cost system
This system helps in assigning manufacturing cost to each
and every product which is produce by UCK Furniture. It
contributes in tracking the expenses. It is important system
which helps in identification of the profitability which is
associated with production of such product. Procedure of
Job costing is defined below:

Prime optimisation system
This system is used the accounting officer of UCK Furniture
to control the prices of different resources. It helps in fixing
the price of different products on single time. It helps in
determination of the fluctuation in demand due to change in
the level of price. This system is used for influencing the
behaviour of customers and improves the sales of their
products.

Inventory management system
This system is used by the manager of UCK Furniture
regarding supervision and management of stock and non
capitalised assets. It helps in effective and efficient flow of
resources in different departments. Two essential function of
this system is defined below:

Different methods used for management
accounting reporting
Accounting officer of UCK Furniture prepares different
kind of reports. Such reports are called as budgeting,
accounts receivable, Job cost, Inventory and manufacturing
reports etc. Important information is collected to forecast
about future actions for making critical decisions.

Budgeting reports
These reports are used to set out the plans. Such plans and
budgets are further used by the manager regarding
evaluation of the performance of department and controlling
of different costs. Budget includes the information regarding
actual expenditure which is incurred by organisation during
the given period of time.

Accounts receivable report
This report provides the opportunity to the manager of UCK
Furniture regarding management of their debtors. It helps in
identification of the amount which is due from different parties.
If organisation is not able to collect their outstanding amount
within the given credit period then it helps in making their credit
policies more strict. It helps in maintenance of effective liquidity
in organisation to meet their day to day requirements.

Order information report
This reports helps in identification of the trend which is
present business. Preparation of this report helps in
integration of the functions with market trends. It provides
the opportunity regarding lowering the cost of placing
orders and improve their profitability.

Performance reports
This reports includes the results which are achieved after the
comparison of actual performance of employees with
budgeted. It provides the information regarding the
deviations in actual performance. Such reports are prepared
on quarterly and monthly basis.

Inventory and manufacturing reports
It is most important important report for all organisations
which indulge in manufacturing activities. UCK Furniture is
manufacturing organisation which helps in making the
inventory process more efficient.

Job cost report
This report provides the information regarding cost,
expenses and profitability which are associated in
performance of particular job. It helps in evaluation of
profitable aspect of project and reduces the expenses by
reduction of their efforts from the less profitable jobs.

Benefits of management accounting
systems
All management accounting systems have their different
functions. Each and every accounting system have their
different benefits which are defined below:
Job costing system
• It helps in recording of cost in more accurate manner
and facilitates controlling of cost by comparison of
actual with estimates.

Continued
Price optimizing system
• It helps to understand the behaviour of customers which is
fluctuate with different pricing levels.
• It provides the opportunity regarding maximisation of their
profits trough adoption of best prices for their products.
• It helps in segmentation of the market and customers
according to their paying capacity.

Continue..
Cost accounting system
• This system provides the information regarding cost incurred in
performance of each and every function. It helps in
ascertainment of the efficiency of different processes and make
improvements.
• Manager used information to decide the price of products and
improves their profit margin.
• It provides the opportunity regarding effective planning about
future operations.

Continue..
Inventory management systems
• It improves the accuracy of inventory orders made by
organisation with the help of information provided by
this system.
• It contributes regarding improvement of effectiveness
and efficiency which helps in saving of time and cost.

Integration of the management accounting
system and reporting with organisational process
Management accounting systems and reports are important for
the organisation to accomplish their targets. There is huge
importance of integration of such systems and reports with
organisational process. It helps in performance of different
functions of various departments. Integration of systems and
reports with organisational process of UCK Furniture is
mentioned below:

Continue..
Types of reporting
Integration with organisational process
Order information report Integration of organisational functions with order information reports helps in
evaluation of the sales order and profits. It provides the opportunity regarding
track the order of customers and satisfaction of their demands within stipulated
period of time.
Performance report Integration of such reports helps in ascertainment of efficiency of employees.
Such reports provides the direction to the employees and helps in
accomplishment of standards. It provides opportunity regarding reduction of
cost and expenditure.
Job cost reports This report has huge importance in organisation. It helps in determination of the
cost which incurred on completion of every job. It helps in achievement of cost
objectives which are decided by UCK Furniture. This also provides the
opportunity regarding determination of their effective pricing strategies and
reduction of the cost from the areas of waste.
Inventory and manufacturing reports It is most important to integrate the organisational functions of UCK Furniture
with inventory reports. It helps in management of their inventory levels. It helps
in effective allocation of resources to different departments according to their
requirements. It also helps in estimation of the manufacturing cost on the basis
of purchase orders which are placed.
Budgeting reports Integration of organisational functions with this reports helps in focusing on the
targets which are set by the manger of each and every individuals. It brings an
obligation upon the employee to accomplish their targets in achievement of
common goals of organisation. Through use of this report effective solutions
are provided to improve their performance.

CONCLUSION
It has been concluded from the above presentation that, Large number
of benefits are achieved by the management of UCK Furniture through
application of different accounting systems. It helps in increasing the
knowledge and performance of existing employees. It brings
coordination among the activities of different departments. Future plans
and strategies are made by the manager to assist the employees and
accomplish their predetermined targets.

References
Chiwamit, P., Modell, S. and Yang, C. L., 2014. The societal relevance
of management accounting innovations: economic value added
and institutional work in the fields of Chinese and Thai state-
owned enterprises. Accounting and Business Research. 44(2).
pp.144-180.
Albu, N. and Albu, C. N., 2012. Factors associated with the adoption
and use of management accounting techniques in developing
countries: The case of Romania. Journal of International
Financial Management & Accounting. 23(3). pp.245-276.
Callahan, K. R., Stetz, G. S. and Brooks, L. M., 2011. Project
Management Accounting, with Website: Budgeting, Tracking, and
Reporting Costs and Profitability (Vol. 565). John Wiley & Sons.

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