Practices to Improve Performance in Management Accounting

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION................................................................................................................................1
TASK.................................................................................................................................................1
CONCLUSION....................................................................................................................................3
REFERENCES.....................................................................................................................................4

INTRODUCTION
Management accounting is a process of which involves producing of management
accounts along with the reports which provide accurate financial information and show the
actual positions of a company which is help managers in decision making process which include
day to day activities (Ward, 2012). It is used as a management tool that look at transactions that
happen in and around a business while considering needs of a business. This report contains a
critical analysis of practices to improve the performance of management in organisation. To
understand the importance of these practices Aston Martin is used. Aston Martin is a British
based luxury sports car manufacturing company headquartered in Gaydon, Warqickshire,
England.
TASK
Performance of a company can be increased by using various practices which help
company to improve its financial performance and efficiency in utilizing its resources. Following
are some practices commonly used by Aston Martin:
 Budgeting: A budget is an estimate made by companies for future expense and revenue
which will be earned by companies in a near future. This budget is made and revaluated
on period basis (Parker, 2012). A budget is a concept of microeconomics which shows
companies trades and expected revenue from those trades and expenditure which will
be incurred in generating revenue. Budgeting is an important aspect of every business
organisation as it provides a roadmap to companies that how much they can bear
expenses, it provides a details of previous years expenses and help mangers to control
all those expenses which are not required by company. Aston Martin also uses budget
to make an estimate to check their cost in producing their cars, it helped managers of
Aston Martin to control their cost and increase their efficiency which resulted in earning
high profits.
 External Reporting: External reporting refers to issuance of company’s financial reports
to external stake holders, investors and other related entities that have a direct interest
in company’s performance and stability. It is important for a companies to present a
external report for their stakeholders, investors, lenders and creditors who have
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