Influence of Customization on Management Accounting System in Retail Industry in NSW

This document analyzes the influence of customization on management accounting systems in the retail industry in NSW. It examines common themes and findings across four articles and discusses the managerial implications of customization. The document also highlights study limitations and suggests future research directions.

Running head: MANAGEMENT ACCOUNTING SYSTEM IN RETAIL INDUSTRY
Influence of Customization on Management Accounting System in Retail Industry in NSW
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1MANAGEMENT ACCOUNTING SYSTEM IN RETAIL INDUSTRY
Table of Contents
Brief Summary of the Theory and Progression in the Field................................................2
Common Themes/Findings across the Four Articles...........................................................2
Different Themes/Findings across the Four Articles...........................................................4
Managerial Implication of the Four Articles.......................................................................6
Study Limitations and Future Research Direction...............................................................7
References............................................................................................................................8

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Brief Summary of the Theory and Progression in the Field
From analyzing several researches carried out in the field of management accounting
systems customization, it has been revealed that modifications in the management accounting
systems and it is observed to be one of the most vital management techniques that can facilitate
in ensuring efficiency in use of organizational resources in the NSW retail sector (Patel and
Harnett 2018). Research in this field also considers that management accounting is deemed to be
among the most important management techniques that distinctly add value through regularly
probing whether the resources are employed suitably for generating value for the Australian
retail companies’ consumers and shareholders. The management accounting systems serve as the
information systems focused on offering relevant information to managers in order to make
decisions that can lead to effective performance of the Australian retail companies (Bouwens and
Abernethy 2015). Such systems are observed to traditionally implement several techniques that
encompass standard costing of products, budgeting along with absorption costing that can offer
timely information to retail company’s managers. In such scenario, management accounting
systems customization can facilitate retail organizations of NSW to attain cost control,
improving and measuring productivity that ensures attainment of organizational goals.
Common Themes/Findings across the Four Articles
From analyzing four selected articles on “Influence of Customization on Management
Accounting System in Retail Industry in NSW” certain common themes are analyzed in these
articles. The selected articles from which common themes are gathered include “The
consequences of customization on management accounting system design”, “Strategy and
management accounting practices alignment and its effect on organizational performance”, “The

3MANAGEMENT ACCOUNTING SYSTEM IN RETAIL INDUSTRY
management of inventories and inventory management system in a small retail enterprise” and
“Comparative analysis of management accounting practices in Australia and Japan: An empirical
investigation”.
 Management Accounting Tools Customization- Bouwens and Abernethy (2015)
revealed that customization of the management accounting in the retail companies
facilitates in improving ERP implementation projects through customization. This can be
done through installation, integration, testing and new systems stabilizing that is likely to
be more complex having an increased failure risk. For this reason, the management
accounting tools such as ERP systems can be customized in order to align the capabilities
of the accounting tools with the operational processes of the retail companies. McLellan
and Sherine (2013) indicated that proper documentations of ERP customizations serves
as the key in decreasing audit risks taking place in maximum retail companies. Moreover,
it has also been evaluated that necessary updates on a timely basis can facilitate in easy
searching and components location. In addition risks revealed in case of management
systems customization in retail companies needs to be decreased through re-using several
components. Such risks must be managed in recognizing and making use of common
features that can increase level of standardization along with re-usability of components
used in retail firms.
 Management Accounting Systems Adopted by Retail Companies- According to views
presented by Patel and Harnett (2018) it is revealed that information that can be gathered
through customizing the managing accounting systems that the tools facilitate in decision
making in the retail companies. It has also been revealed that the management accounting
information gathered by the retail companies through customizing their accounting

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systems facilitates in analyzing the strategies on new product development along with
facilitating in carrying out more positive performance analysis of companies along with
appraising the capital expenditure projects. Wijewardena and De Zoysa (2014) revealed
that customization of the management accounting in the retail companies facilitates in
improving ERP implementation projects through customization. This can be done
through installation, integration, testing and new systems stabilizing that is likely to bed
more complex having an increased failure risk. For this reason, the management
accounting tools such as ERP systems can be customized in order to align the capabilities
of the accounting tools with the operational processes of the retail companies.
Different Themes/Findings across the Four Articles
From analyzing the selected articles on the impact of management accounting system
certain different themes have been observed in examining the impact of management accounting
systems customization on the retail companies. These themes are explained under:
 Concept of Customization- Bouwens and Abernethy (2015) indicated that
customization pursuit is considered as retail production flexibility that is considered to be
new competitive edge for these companies. It is also explained to be the extent to which
business unit facilitates individual consumers to impact the product features offered by
the retail organization. In contrast, McLellan and Sherine (2013) indicated that
customization is conceptualized within the research as a continuum as it indicates low
level of customization in which services offered by the retail companies is totally
customized for being suitable to consumer requirements. Moreover, in explaining the role
of customization in impacting the use of management accounting systems in retail

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companies, these reasechers explained customization in accounting systems to develop a
develop a formal system developed for offering information to the managers. In
examining the role of customization in retail management accounting systems four
aspects are considered including scope, integration, aggression and timeliness. On the
other hand, Patel and Harnett (2018) explained that customization in the management
accounting systems in retail companies’ offers relevant information at the functional level
that offers managers with vital data on all the departments. These reasechers also
revealed that customizations on the management accounting systems are relied heavily on
the timely dimension at the time information is provided frequently and when there is less
delay between when an event takes place and at the time information regarding such
event is attained by the managers.
 Relationship between Customization and Management Accounting Systems-
McLellan and Sherine (2013) elaborated that three are four dimensions of management
accounting systems that are conceptually distinct. For instance, wide scope along with
integrated information might be oared in an aggregated manner. The management
accounting systems serve as the information systems focused on offering relevant
information to managers in order to make decisions that can lead to effective
performance of the Australian retail companies (Bouwens and Abernethy 2015). Such
systems are observed to traditionally implement several techniques that encompass
standard costing of products, budgeting along with absorption costing that can offer
timely information to retail companies’ managers. In such scenario, management
accounting systems customization can facilitate retail organizations of NSW to attain cost
control, improving and measuring productivity that ensures attainment of organizational

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goals. These reasechers also indicated that the variation among such dimensions simplify
signifies the relationship among the variables. The relationship between the
customization and management accounting systems is carried out in two stages in a way
that these factors change the decision making nature through enhancing uncertainty level.
All the four articles focused on different approaches of explaining the impact of
customization on management accounting systems used in retail companies.
Customization of all the dimensions of managerial accounting systems facilitate in
decreasing the information gap that can further result in resolution of conflicting
objectives developed by retail companies in NSW.
Managerial Implication of the Four Articles
After analyzing the four selected articles on the impact of management accounting
systems customization, effective managerial implication was revealed that it has on the retail
companies of NSW. Moreover, it is also evident that there are certain important aspects
associated with management accounting systems that includes operating budget, improvement of
standard costing system and efficiency of the operational information. This can facilitate the
retail companies in recoding department expenses and revenues that encompass salaries and
materials provided to employees. Customization in the management accounting systems can also
support the retail companies in developing measures to control standard costs that are used to
support managerial decision making trough providing anticipated product expenses. The
financially asked management accounting systems used in retail organizations focus on
maintaining management data on departmental performance and outputs. This includes
prediction volumes, lead and delivery times, and product defects along with resource
consumption control in the retail companies. Custom accounting software can facilitate the retail

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organization in conducting financial activities smoothly through managing the budgets of the
retail company products and offer relevant information to investors or owners. The management
accounting systems serve as the information systems focused on offering relevant information to
managers in order to make decisions that can lead to effective performance of the Australian
retail companies.
Study Limitations and Future Research Direction
Despite having several managerial implications, the research on this field is observed to
have certain limitations those are needed to be addressed in the future study. From analyzing the
four selected articles it has been gathered that the implications of accounting systems
customization did not focus on analyzing the implementation of accounting systems in
improving complexity of retail companies business (McLellan and Sherine 2013). The future
research will focus on analyzing the role of enterprise accounting software in the retail
company’s workflow management and business planning. The existing researches also did not
focus on analyzing the development costs that is impacting the accounting software
development. Considering such gap, the future research must carry out study on analyzing the
use of modern custom accounting systems in retail companies in tracking financial metrics in
order take their business operate efficiently.

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References
Bouwens, J. and Abernethy, M.A., 2015. The consequences of customization on management
accounting system design. Accounting, Organizations and Society, 25(3), pp.221-241.
McLellan, J.D. and Sherine, F.A.A., 2013. Strategy and management accounting practices
alignment and its effect on organizational performance. Journal of Accounting–Business &
Management, 20(1), pp.1-27.
Patel, A. and Harnett, D., 2018. The management of inventories and inventory management
system in a small retail enterprise.
Wijewardena, H. and De Zoysa, A., 2014. Comparative analysis of management accounting
practices in Australia and Japan: An empirical investigation.