Management Accounting: Types, Techniques, and Tools for Financial Planning

Management Accounting

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY..................................................................................................................................................3
Part 1...........................................................................................................................................................3
Types of Management Accounting systems along with essential need. .................................................3
Distinction between management accounting and financial accounting:...............................................4
Types of Management Accounting systems: ...........................................................................................4
Management Accounting reporting:........................................................................................................5
Benefits of MAS:......................................................................................................................................6
Integration of MAS and MA reports.........................................................................................................6
Part 2...........................................................................................................................................................7
Accounting techniques to prepare financial reports................................................................................7
Management Accounting techniques used in order to prepare all the financial reports......................11
Interpretation of data............................................................................................................................11
Part 3.........................................................................................................................................................11
Various tools of planning.......................................................................................................................11
Planning tools for forecasting budgets..................................................................................................12
MAS to solve financial issues. ...............................................................................................................13
Accounting techniques:.........................................................................................................................13
Comparison:..........................................................................................................................................14
To figure out financial problems MA is used..........................................................................................14
Planning tool to figure out financial problems.......................................................................................14
CONCLUSION.............................................................................................................................................15
REFERENCES..............................................................................................................................................16

INTRODUCTION
Accounting is a process which mainly deals with all the financial transactions for which
there are some accounting approaches such as management accounting which focuses on each
and every sort of transactions. It has been said that management accounting refers to the
accounting approaches which is responsible for tracking all the financial as well as non-financial
records. It is said that MA is designed for all the managerial aspects so that they can take
corrective steps associated with monetary as well as non-monetary resource (Amir, Rehman and
Khan, 2020). In the present report, chosen organization is Innocent drinks limited where it is a
client of a business entity AJ and sons which provides consultancy services associated with
accounting. This is the report which is divided into three main sections where first includes
information linked with MA systems & reports. Whereas, in second part information related to
financial techniques along with their implications on specific data. At last, discussion about the
contribution related to planning tools & MA systems are included.
MAIN BODY
Part 1
Types of Management Accounting systems along with essential need.
Management Accounting- It refers to an effective accounting which is mainly targeted in
order to gather as well as assess all the required information which has been occurred during the
financial year. It is the process which is conducted in order to develop internal accounting reports
which plays very essential role in the growth and success of a business entity.
Purpose of Management Accounting- It is said that the main purpose is to acts as one of
the most essential and effective element for the internal stakeholders which assist them in order
to take decisions in a well define manner (Balstad and Berg, 2020). This is the accounting
process which act as framework which enhance the overall performance of the business entity in
an effective manner. In addition to this, it has also been said that this is the process which acts as
a controlling mechanism for business entities which leads towards the improved performance of
the business entity.

Distinction between management accounting and financial accounting:
Base for
comparison
MA Financial accounting
Users This is the accounting process
which is designed for all the
internal stakeholders.
This method is used by internal as well as
external stakeholders both.
Regulations I order to prepare this sort of
accounting no rules as well as
regulations are going to be used.
This sort of the accounting system which
contains different type of regulations
needs to be considered by the accountant
while preparing the report.
Type of
company
It is the type of accounting which
can be implemented in any kind of
a business entity (Bhimani, 2020).
Whereas this the accounting system
which requires special organizations
which are usually listed in stock
exchange.
Types of Management Accounting systems:
Management accounting is one of the most effective accounting system which are almost
linked with each segment of a business entity. This as a result creates ample number of
management accounting systems going to be explained in the present report as follows: Cost accounting system- This is the accounting system which is developed with a
procedure of tracking as well as controlling all the expenses which might arise in the
business entity within a accounting cycle. This is the system where each and every item
cost is recorded as well as compared with the standardized cost which will make it easier
to identify the efficiency & progress of various tasks in context of their expenses. In the
present context of Innocent drinks limited, the finance managers of the company can gain
key information with the help of this accounting system related to cost of various
activities as well as the variance (Căpușneanu and et. al., 2020).
Essential requirement- The requirement of the accounting system is to effectively control all the
unwanted expenses which as a result increases the revenues of the business entity. In reference to