Management Accounting and Reporting Systems

The provided project report discusses the importance of management accounting in recording essential information for companies. It highlights the use of accounting systems and reporting to make informed decisions about future growth and sustainability. The report covers various types of management accounting reports, including operational budget reports, performance reports, inventory reports, account receivable reports, and job cost reports, which are used to evaluate a company's overall position in the market.

Management
Accounting
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Table of Contents
INTRODUCTION...........................................................................................................................3
1.1. Management accounting requirements and its different types of systems......................3
1.2: Different types of accounting system reporting use by UKC furniture..........................4
1.3: Benefits of using management accounting system..........................................................6
1.4: Critical evaluation of accounting reporting system.........................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Management accounting helps to provides the financial information of the company. It is
the process of preparing the accounts and management reports which provides the true and fair
picture of the organisation. In this assignment chosen organisation is UCK Furniture. This will
assist in effective decision making of overall attainment of the companies aims and objectives. It
is established in United Kingdom. The aim of this presentation is to elaborate the management
accounting and reporting system that are used within the company. Apart from this, benefits of
using types of accounting system are covered under this project. evaluation of interlink among
reporting and accounting are mentioned effectively (Kaplan and Atkinson, 2015).
1.1. Management accounting requirements and its different types of systems
Meaning: It is important for every organisation to know its financial position. It is the
process of analysing, evaluating and communicated the financial and accounting information to
management of company. It helps to maintain accounts and financial reports of the organisation.
Through it management can know about its financial position. It helps to ascertain the amount of
available cash, outstanding debts, stock and sales revenue of the organisation. It generates
weekly or monthly reports for the department managers like chief financial officer of the
company. It helps to UCK Furniture’s to know about its accounting and financial reports.
Definition: Management accounting is said to be one of the effective ways of recording,
summarizing, communication, planning and evaluating the various facts and records that are
mentioned in the statements. Manager of UKC furniture uses these information and reports for
the purpose of making effective plan, cost control and other accounting related data for future
benefits of the group (Hilton and Platt, 2013). There are various types of management accounting
system which are such as follows:
Cost accounting system:
Cost accounting system is also known as costing system which is used by the company to
ascertain the cost of its products. It helps in profitability analysis, cost control and inventory
valuation. This particular accounting system assist in overall estimation of reliable cost of their
products which is produced by the UKC furniture in one financial year. It is essential for UCK
Furniture to know the accurate cost of its products which is helpful to determine the price. There
are two types of cost accounting system which are as follows:
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Job order costing: This happens to be one of the essential tools and system that can
record the costs of a product manufactured during the period of time. Through this, a project
manager can maintain and keep record of their work on regular basis. It is a costing method
which is used by the companies to ascertain its manufacturing cost of a product or the batches of
products. UCK Furniture can know its manufacturing cost of its various types of furniture
products. This system is important when manufactured products are sufficiently different from
each other (DRURY, 2013).
Process Costing: Process costing is used when the manufactured units vary significantly
from each other. It is used in cost accounting to analyse the one method for collecting and
assigning cost of manufacturing units which are produced. This method is required to analyse the
process cost of manufacturing units of UCK Furniture.
Inventory management system:
Inventory represents the stock in the business like stock of materiel and finished goods.
Inventory can be change on daily, weekly or monthly basis. This system helps to manage the
inventory in its business. It is important for the company to know how much stock it should be
maintain on daily, weekly or monthly basis. Proper inventory should be maintaining by UCK
Furniture to fulfil the demand of customers. There is various software which provide help to
manage the inventory in the organisation. There is various application of inventory management
system such as actual position stocks available to the business can easily be identified by the
company.
Price- optimizing system:
It seems to be one of the reliable aspects for every organisation that are associated with
production process. It is more useful as numerical analysis through the UKC furniture to
examine customer perception regarding different prices for any product and services produced by
the company. Prices are set according to the customer’s expectancy. UCK Furniture set its prices
as per the need of consumers so that they are willing to pay it and organisation is able to sell its
products quickly in the market.
1.2: Different types of accounting system reporting use by UKC furniture
It has been seen in most of the business organisation that they are getting maximum
issues while reporting any specific information about the company. The primary role of
managers it to collect and evaluate all the essential facts that are associated with management
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then shows them in clear and easy manner. Management reporting system need to capture the
sorts of data requirements through a company’s managers to operate the business effectively.
These sort of financial data that are shown in annual reports is typically more essential for UKC
furniture. As, they need to presented in annual reports effectively at their core activities that are
done within UKC furniture (Flamholtz, 2012).
As reporting is more useful by using accounting data in to their respective format so that
closing results would be analysing in more effective manner. It could be more comprehensive
accounting information to facilitate them to have proper management and control over the stocks
that are presented within the company. UKC furniture company used to make report in order to
analyse their total expense and cost incurred on the production or one additional units. This
seems to be best method for reducing the wastage and losses that are arises at the time of
manufacturing. Accounting reports are more tough to manage for the company. these are custom
made reports that are intended for the purpose of attaining maximum profit with limited
resources.
There main objective is earning maximum profit as they can also set specific standards
that can easily cop-up with the overall management of the available resources. These sources of
preparing reports are taken from different statements such as journal, trail balance, profit and
loss, balances sheet as well as changes on cash flow statements (Brandt, Van Biesebroeck and
Zhang, 2012). These are useful for the attainment of long term aims that are responsible for
attaining sustainability and future growth. There are various kind of accounting reporting which
are prepared by the managers of UKC furniture. Some of them are discussed below:
Account receivable aging report: These kind of report is useful in deciding aggregate
arrangements of unpaid customer receipt and utilization of methods to determine collectable
debtors' information. It is considered as one of the essential instruments used by the directors to
collect data to assess add up to detail of past due for the instalment.
Inventory management report: It is the most vital specifying methods which is being
utilized by an association to supervise and control stock level of organisation with in
organisational context. These reports are assessed by the assistance of different equipment and
systems, for example, ABC costing, stock turnover proportion and EOQ.
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Job costing report: It is a viable revealing strategy for recoding all external expenses of
different activities work. With the assistance of this reports, a task supervisor or record office
uses to track add up to expenses of a specific employment.
Operational budget report: It is the main divisional report that is prepared according to
set up points and objectives. This helps in assessing complete costs and expenses which is to be
incorporated to income generation process. It sustains wide effects on aggregate efficiency of the
operating department. Payment plans are most important part considered essential for influencing
to break down of future estimations (Libby, 2017).
Performance report: It report helps in arranging procedure for better control and
operation. It comprises gathering and scattering critical information, transmit venture
development and appropriate distribution of assets. These reports are the part of accommodating
in deciding relationship among actual and standard exhibitions of an association.
1.3: Benefits of using management accounting system
All the above discussed accounting systems are equally beneficial for an organisation. It
can assist manager of UKC furniture to follow certain process for the preparation of management
reports and accounts that can deliver accurate and on time statistical data for making short or
long term decisions. An effective accounting system can reach into all departments of a business.
Some of them are more crucial with the ability for UKC group of the company to enhance their
operations and growth within an accounting period of time. This would lead to develop
maximum opportunities for getting competitive benefits through determining total cost for UCK
production. Some of them crucial benefits are mentioned below:
Cost accounting system:
Through the help of effective costing systems, UKC group of company can easily be able to
manage their manufacturing process more properly. This would lead to increase the future
efficiency for the company (Hall, 2012).
 It will be effective for company to fix a cost for their products on the basis of the cost of
manufacturing. It can be tough contracts that can have minimum cost of finishing any
kind of contract that can be ascertained.
Price optimisation system:
 This has become more crucial to enhance productivity by the help of analysing the
customer perceptions (Price optimisation, 2017).
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 It would happen to be one of the most crucial elements of price strategies that can assist
UKC furniture to determine profitability level of the company.
Inventory management system:
 UKC company can attain efficiency and productivity in operations. It would help in
keeping stock updates on regular basis.
 Minimise cost of production and set benchmark for maximising overall sales and profit
for the company.
Job costing system: There are various vital aspects that are associated with the accessibility. It
will be deliver proper link among all those expenses that are arises in each job.
1.4: Critical evaluation of accounting reporting system
In the opinion of Edwards, 2013, accounting systems and reporting are directly related
with each other. Management of UKC can uses all these for the purpose of analysing and
reporting the journals and other financial information’s those are done during the period of time.
This can lead to analyse the overall position of the company in the market in accordance with the
other. This would be taken from various statements such as profit and loss, balance sheet and
cash-flow statements. It can also be primary role and duty of manager or accountant to make
continuous valuation of the records before presenting it in front of the investors. For the purpose
of making better planning, they are required to make proper use of reporting system. Some of
them are mentioned below:
Evaluation of accounting reports:
 Operational budget report: The basic motive of organisation is to increase the profit for
the company through selling their products and services.
 Performance report: As this types of reports are basically assist in developing a well
organise plan for the upcoming sustainability for the company.
 Inventory report: Through this particular report, manager used to make an effective
strategy about how to store maximum inventory without getting damage.
 Account receivable report: As per this report, accountant would need to evaluate all the
activities that are outstanding for so many time.
 Job cost report: According to this, manager of UCK furniture used to analyse that their
operation is going into correct direction. Because all the success can be relying on these
analyses about the total number of production.
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CONCLUSION
From the above project report, it has been concluded that management accounting is more
effective process that is used by the company in order to make recording of their essential
information. For this purpose, they take use of accounting systems and reporting. All the
information is having equally beneficial for in terms of attaining future growth and sustainability.
By the help of necessary data, management can easily be able to make decision for increase the
goodwill and profitability at the same point of time.
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REFERENCES
Books and Journals:
Kaplan, R. S. and Atkinson, A. A., 2015. Advanced management accounting. PHI Learning.
Hilton, R. W. and Platt, D. E., 2013. Managerial accounting: creating value in a dynamic
business environment. McGraw-Hill Education.
DRURY, C. M., 2013. Management and cost accounting. Springer.
Flamholtz, E. G., 2012. Human resource accounting: Advances in concepts, methods and
applications. Springer Science & Business Media.
Brandt, L., Van Biesebroeck, J. and Zhang, Y., 2012. Creative accounting or creative
destruction? Firm-level productivity growth in Chinese manufacturing. Journal of
development economics. 97(2). pp.339-351.
Libby, R., 2017. Accounting and human information processing. In The Routledge Companion to
Behavioural Accounting Research (pp. 42-54). Routledge.
Hall, J. A., 2012. Accounting information systems. Cengage Learning.
Edwards, J. R., 2013. A History of Financial Accounting (RLE Accounting). Routledge.
Online
Price optimisation. 2017.[Online]. Available through: < https://blog.blackcurve.com/what-is-
price-optimisation>.
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