A Detailed Report on Management Accounting Techniques & Systems

This report provides a comprehensive overview of management accounting techniques and systems, contrasting traditional methods with newly developed approaches. It delves into strategic management accounting, highlighting its role in business strategy formation, decision-making, and risk management. The report discusses the benefits and drawbacks of traditional accounting systems, emphasizing data integrity and error reduction, while also exploring the advantages of automated accounting systems, such as online invoicing, customization, and improved data storage. Furthermore, the report examines strategic cost management techniques, including value chain analysis and cost driver analysis, underscoring their importance in achieving competitive advantage and organizational goals. The analysis concludes that effective management accounting is essential for informed business decision-making and overall organizational success. Desklib offers this and many more solved assignments for students.

Running head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
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Table of Contents
Introduction...........................................................................................................................................2
About management accounting.............................................................................................................2
Explanation about the difference between traditional and new management accounting techniques
and systems........................................................................................................................................3
About the newly developed accounting system.................................................................................4
Strategic management accounting.....................................................................................................5
Strategic management accounting techniques....................................................................................6
Strategic costs management techniques.............................................................................................6
Conclusion.............................................................................................................................................7
References.............................................................................................................................................9

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Introduction
The main aim of the report is to describe about the new management accounting techniques
and systems. Management accounting techniques are used for the purpose of analysing the business
strategy formation that will help in the proper execution of decision making and will also help in
managing the risk. This also helps in providing a proper approach that will help in assigning the cost
that are based on resource usage (Bromwich 2017). The tools and techniques that are used for
management accounting are financial planning, cost accounting, cash flow analysis and marginal
costing. The management accounting helps in providing provisions so that the organization can
improve the management and performance control functions.
About management accounting
The management accounting uses proper accounting information that helps in proper
management of the accounts within the organization. The management accounting practices that are
implemented includes strategic management, performance management and risk management (Cadez
and Guilding 2018). Strategic management helps in advancing the role that a management accounting
in the form of a strategic partner. This will help in improving the long term decision making for
companies especially small business. Small business is needed to make decision within the
organization. The main 11 techniques that are used as a management accounting technique are
Analysis of financial statement, Financial planning, Historical cost accounting, Budgetary control,
Marginal costing, Funds flow statement, Cash flow statement, Decision making, Revaluation
accounting, Statistical and graphical techniques, Communicating.
Explanation about the difference between traditional and new management
accounting techniques and systems
Traditional accounting system helps in predicting the accounting method that will help in
predicting the profits. The methods used for the prediction purpose are cause and effect techniques.
This takes the accounts direct and calculates the indirect costs and expenses that are taking place

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within the business (Otley 2016). The major advantage offered by traditional accounting information
system is that it helps in avoiding the data system errors and also reduces file corruption. It is
observed that the traditional accounting system includes execution of a single file that is being used
for the purpose of eliminating the confusing between the users using the system and also offers same
kind of data. Traditional accounting system offers the users with the ability of providing double entry.
This allows the users to eliminate the errors that take place at the time of data entry. In the traditional
accounting system ensures that each transaction that is taking place within the system has a proper
debit as well as a separate account for credit (Sedevich-Fons 2018). This ensures that the time of
companies that is required at the time of transactions and ensures elimination of error at the point of
data entry. At the time of major breakdown and loss of internet connection the transaction will be
continued. This makes the accounting system more efficient and effective. This ensures that the
account data can be accessed properly at any time. Breakdown of internet or effect of power will not
affect the working of the accounting system.
Apart from the benefits that are observed there are several disadvantages associated with the
traditional accounting system. Cost is the major disadvantage is that the system becomes very
expensive. The number of employees required increases and the efforts needed also increases. The
traditional accounting system is mainly concerned with the upfront cost. Thus it is important to have a
proper automated accounting system.
About the newly developed accounting system
The main features that are developed in the new accounting system include subscription
billing, task management, client management, free invoice templates and time tracking. The
automated accounting software will ensure proper online invoicing (Schaltegger and Burritt 2017).
The major features that are implemented within the newly developed accounting system includes
proper customization by industry, helps in time saving, the storage can be maintained properly and
also helps in computerizing the report that is used for the proper maintenance of the system. The
major advantage offered by the computerized accounting system includes data entry with a great
speed. The major reason behind having an automated accounting system is that it offers an efficient

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way of making the business successful (Nitzl 2016). The productive also ensures proper way of
saving the valuable time. This helps in maintaining the business and all financial information that can
be organized well within the organization. The features include:
Automated, flexible financial processes the newly accounting system should have proper charts
that will ensure proper handling of the accounts. This will help to analyse the present financial
information without any complexity within the system. This also uses proper eternal tools that help in
preparing the proper reports (Mirzaey, Jamshidi and Hojatpour 2017). This enhances the flexibility of
the accounting system and will help in the growth of the business system.
Business insight the newly developed accounting system will help in providing in depth real time
insight towards the business. This allows to capitalizing the new business opportunities that are
needed for analysing the actions.
Cloud architecture modern accounting system includes cloud based architecture as it will ensure
that the technology risks associated with the organization reduces, IT costs also reduces and also
improves the productivity. The cloud architecture allows flexibility that will provide ease towards the
business.
Strategic management accounting
Strategic management accounting includes evaluation of external information that are faced in
correspondence to the competitors within the marketplace and political policies that are affecting the
current trends in prices, costs and shares. The management focuses on three basic elements that are
cost, quality and time. Strategic accounting management is mainly a process that is described at the
organizational level and goes beyond sales for encompassing the building strategic. This also provides
mutual beneficial relationships between the customers and the company (Maskell, Baggaley and
Grasso 2016). After analysing the concept of strategic accounting management it can be stated that
the manager finds opportunities that will help in diving the value towards the partners associated with
the organization after analysing the problems. The benefits that are obtained with a proper strategic

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accounting management includes increases the customer loyalty, stimulates the growth, allows
increase in the profitability and helps in driving innovative and scalable service solutions. The
strategic accounting management offers an effective way of organizing the process that will help in
development process. This also helps in maintaining a valuable relationship along with the customer.
The strategic plan needs to have proper features that are needed within the organization. The
organization needs to have the following features:
Proper dedicated strategic account managers before creating a successful program execution it
becomes important to ensure that proper account managers are needed who will help in separating the
sales department differently. The strategic manager needs to have a proper analytical and personable
knowledge about the accounts. This will develop proper skills that will help at the time of decision
making and will provide proper communication with high level managers.
Proper selection criteria for key accounts the organization needs to decide which customers are
reserved for customer’s partnership propels that will help in achieving the goals (Lopez-Valeiras et al.
2015). The criteria include product fit, effective revenue potential, growth potential, existing
relationships and potential channel partnership.
Creation of a comprehensive customer profile the strategic account manager needs to have a
proper knowledge regarding the customer. The organization needs to develop a depth customer
portfolio that will help in understanding the need of the system.
Strategic management accounting techniques
There are several techniques that are used for the purpose of managing the accounts. The
strategies and tools that includes target costing, Kaizen costing, life cycle costing, theory of
constraints and bench marking (Ismail, Isa and Mia 2018). The strategic planning and execution
includes planning the strategy that is needed for analysing the objectives off the organization. The
balanced scorecard will include operational dashboards. Apart from this the tool also includes strategy
mapping. In order to manage the performance and measurement it is important to have a proper
benchmarking and performance prism.

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Strategic costs management techniques
Strategic cost management is used for reducing the total costs that will ensure improvement
position within the business. This objective is achieved with the help of better understanding of the
costs that will support the company’s strategic position and will not impact the organization. Cost
management should be developed in such a way that it will reduce the costs and will increase the
proper strategy within the field (Appelbaum et al. 2017). This is a continuous process that will
provide a better change over time. The major objective of strategic cost management is to help the
leaders to achieve the goals of an organization. This helps in gaining proper competitive advantage
proper conceived cost reduction strategy will enable the manger in capturing the maximum value
within the form and will ensure direct savings. The techniques that are used for cost management
within the project includes proper planning for the project budget, keeping the track of the cost ,
implementing effective time management, project change control and use of the earned value. The
techniques that are used for the purpose of strategic cots management techniques include: Strategic
cost management, Value chain analysis, Strategic positioning, Differentiation, Cost leadership, Cost
driver analysis, Execution cost drivers, Structural cost drivers, Value.
Conclusion
Thus from the report it can be concluded that roper management accounting is important for
analysing the business requirements properly. The report has described the need of proper
management within an organization. Performance management helps in developing proper practices
at the time of business decision making. Risk management helps in contributing the frameworks and
ensures proper identification of objectives within the organization. The managerial accounting helps
in identifying the process, analysing the record and presenting financial information management. The
report has also included proper strategic costs management technique. The paper has also described
the concept of Strategic management accounting (SMA). Strategic management accounting is based
on merging of strategic business objectives with the strategies related to management
accounting information. This helps in providing a forward modelling that will assist the business
making decision process within the management. The paper has also explained about the management

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accounting system and the newly developed accounting system that will be beneficial for the users
and organization. The advantages offered by the newly developed accounting system are also
described in the report. Hence it can be stated that the newly developed system will be beneficial for
the organization.

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References
Appelbaum, D., Kogan, A., Vasarhelyi, M. and Yan, Z., 2017. Impact of business analytics and
enterprise systems on managerial accounting. International Journal of Accounting Information
Systems, 25, pp.29-44.
Bromwich, M., 2017. The case for strategic management accounting: the role of accounting
information for strategy in competitive markets. Accounting, Organizations and Society, 15(1-2),
pp.27-46.
Cadez, S. and Guilding, C., 2018. An exploratory investigation of an integrated contingency model of
strategic management accounting. Accounting, organizations and society, 33(7-8), pp.836-863.
Ismail, K., Isa, C.R. and Mia, L., 2018. Market Competition, Lean Manufacturing Practices and The
Role of Management Accounting Systems (MAS) Information. Jurnal Pengurusan (UKM Journal of
Management), 52.
Lopez-Valeiras, E., Gomez-Conde, J. and Naranjo-Gil, D., 2015. Sustainable innovation, management
accounting and control systems, and international performance. Sustainability, 7(3), pp.3479-3492.
Maskell, B.H., Baggaley, B. and Grasso, L., 2016. Practical lean accounting: a proven system for
measuring and managing the lean enterprise. Productivity Press.
Mirzaey, M., Jamshidi, M.B. and Hojatpour, Y., 2017. Applications of artificial neural networks in
information system of management accounting. International Journal of Mechatronics, Electrical
and Computer Technology, 7, pp.3523-3530.
Nitzl, C., 2016. The use of partial least squares structural equation modelling (PLS-SEM) in
management accounting research: Directions for future theory development. Journal of Accounting
Literature, 37, pp.19-35.
Otley, D., 2016. The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, pp.45-62.

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Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts and
practice. Routledge.
Sedevich-Fons, L., 2018. Linking strategic management accounting and quality management
systems. Business Process Management Journal, 24(6), pp.1302-1320.