Management Accounting Techniques - Report

Added on - 21 Jul 2020

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MANAGEMENT ACCOUNTINGTECHNIQUES1
ContentsINTRODUCTION.................................................................................................................................31.Role of management accounting within the organisation...........................................................32. Understand cost accounting terms, classification and technique....................................................43. Comprehend, select and apply decision making technique to facilitate business decision makingprocess...............................................................................................................................................54. Identify and apply appropriate budgeting technique and methods use for planning and control....65. Performance management information and measurement systems and assess the performance ofan organisation..................................................................................................................................6CONCLUSION.....................................................................................................................................6REFERENCES......................................................................................................................................82
INTRODUCTIONManagement accounting helps to manage organisation and departments in systematic manner.Mostly management decisions and management operations are the part of management accountingsystem. It is very useful for the organisations to implement and use management accounting systemwithin the organisation (DRURY, 2013). This report is prepared subject to define the role ofmanagement accounting with in alpha ltd company. Appropriate techniques of costing and budgetingare defined in this context which are used in decision making. Performance management informationand measurement system is also defined in this report.1.Role of management accounting within the organisationManagerial accounting helps the company in formulating effective financial strategies,monitor expenses and maintains profit margins. The role of management accountinginfluences all aspects of firm’s operation. It refers to the process of preparingmanagement accounts and reports that gives timely and accurate information andstatistics needed by manager to make short-term decisions and day to day activities.Unlike financial accounting, that prepares report mainly at the end of accountingor financial year, management accounting help managers to prepare annual report onmonthly, weekly or quarterly basis for the internal audience of the company includingchief executive office, different departments etc. These types of reports mainly show theamount of available cash, accounts receivable and payable, sales generated, varianceanalysis, outstanding debt and other related statistics. Many organization in order tosurvive in the competitive environment, that is concerned with rapidly changingtechnology and market demand, are using modern methods to continuously work onenhancing their quality control and reducing the cost of their product so as to gain highcompetitive advantage over their rivals. In this particular situation, companies likeAPLHA are changing their traditional information system to management accounting.The primary function of management accounting is to aid management through theprocess of revenue and profit maximization. Following are the roles of managementaccounting:1.Formulate Financial Strategies: Management accounting assist in formulating financialstrategies using budget, sales forecast and job costing techniques (Granlund, 2011). They alsocake take into consideration data from company’s financial report to develop effectivestrategies that leads to enhance their net profit, gross income and earnings per share.2.Explain Financial Consequences of Decisions: With the help of managementaccounting, manager can easily state the ramification of adding additional equityfinancing or debt. Moreover, it also aid in explaining how decisions influence financialstatement and budget. For example: How decision made by company’s manager changethe overall profit and loss for the given period of time.3.Monitor Expenses: With the management accounting, manager can create flexible,static or rolling budget along with other essential report that help manager in monitoroverall expenses of the company throughout the year. It helps manager to runorganization in cost effective manner. In addition to that, with the help of managementaccounting report it become much easier for stakeholder and other internal members tounderstand the nature of the expenses related to each department in an effective manner.Maintain Profitability: There are many management accounting tools that can betaken into consideration while analysing the profitability of the firm or maintaining break-3
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