Managerial Accounting System: Techniques, Relevance and Functionality

This report discusses the techniques, relevance and functionality of managerial accounting system based on Microsoft's perspective. It explains the importance of ABC analysis, BSC analysis and TQM in management accounting. It also compares and contrasts the activities of different organizations to understand the uses of management accounting system.

Managerial Accounting
System
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ABSTRACT
Management accounting can be defined as a technique that helps an organisation to recognize
their potential profits. They are the main focus to complete their work within a minimum time
with more efficiency and effectiveness. The main agenda to implement management accounting
in the organisation is to earn more amounts of profits. It is based on the internal departments and
variance cost analysis. Key activities of management accounting relate to budgeting, financial
accounting, cost analysis and various others system and procedures that work effectively for the
organization. This project is based on the perspective of Microsoft which is providing its IT
services among the overall world (Spraakman and et. al, 2015). The main purpose of this report
is to understand the relevance and functionality of the accounting system of management which
is used by the multi-national organisation to complete their work.
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Contents
Managerial Accounting System.......................................................................................................1
ABSTRACT.....................................................................................................................................3
Main Body.......................................................................................................................................3
Identification of the three example of management accounting techniques from the case...3
Relation of management accounting system within the organisation....................................4
Comparing and contrasting various activities of the organisation to understand the uses of
management accounting system.............................................................................................6
Conclusion that are related with management accounting system to understand business
environment............................................................................................................................8
Specific outcomes that are learned from the above articles to understand management
accounting system..................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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Main Body
1. Identification of the three example of management accounting techniques from the case
Management accounting method is implemented by every organisation among the overall world.
This determines it assist an organisation to increase the performance of their internal department
of a corporation. The main function of the management accounting system is to analyse the
profits of a business by depicting the cost of their product to sale them in the market. Moreover,
it also helps a firm to analyse various management techniques which helps them to considers all
profits that are provided by an organisation to its employees (Mirzaey, Jamshidi, and Hojatpour,
2017). As per the author of this article, it is predicted that there are different management
accounting techniques are presented in the industry. Like (JIT) Just in Time, (ABC) Activity-
based costing, (TQM) Total quality management, (VCA) Value chain analysis and many more.
This technique helps the firm to predict the insights that are related to the cost of the
management of an organisation. Some of them are explained below:
ABC Analysis- This approach is considered with the purpose of classifying the inventory on the
base of their consumption. This approach helps the management to identify the actual value of
their item which is consumed in a specific period. ABC approach is based on the principle of
Pareto in which management uses different matters and the implication of approach to fulfil
organization purposes. It is seen in the approach of ABC classification of the tools is done on
various basis that is divided from the highest consumption to the lowest consumption. This
approach work as the highest turnover inventory is classified with the basis of A whereas the
inventories that are interclass are conducted as the B part. Whereas on the other side the product
or service of the organization that is low in consumption is classified based on C. Along with this
it is seen that the performance of a business is not constant. It determines that there are several
up and downs are present in the market which impacts the performance of the business. Hence, it
is beneficial because it improves the performance of an organization on an overall basis. Further,
in last with the help of this article, it is seen that this tool helps the firm to check the volume of
their product rapidly (Melnyk and et. al, 2014). So, it is easy for them to analyse the number of
products which are sold in the market along with those that remain in the stock for a longer
period.
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BSC analysis- In present scenario there are different functions are performed by an organization
to complete their work with more efficiency. So, this is mandatory for them to analyse all the
aspects to monitor the performance of the organization on an overall basis. With the BSC
approach, it is easy for organisation to consider the scorecard which is used to analyse the
performance of the firm. It is also known as the performance metrics which are used to improve
the performance of an organization on internal as well as external basis. Moreover, it is used by
Microsoft to achieve their objectives, measurements, and initiatives so the goals and objectives
of the organisation will be achieved with more efficiency and effectiveness.
TQM- This approach is one of the most effective tools or technique of the management
accounting system. Majority of the organization focuses on this tool so that it is easy for the
administration department to formulate an effective structure for the corporation. Along, with the
approach of TQM considers on the process in which is monitor that this helps an organisation for
improving the quality of their product which is offered by them in the market. To implement this
approach effectively, management must focus on internal as well as external departments of the
organisation to complete their work with more efficiency. TQM is a process which focuses on
the consumer. Therefore, management must implement this in organisation for increasing the
productivity of their products and services (Maya sari, 2016).
Relation of management accounting system within the organisation
Management accounting system is an essential part of the organisation that encourages their
capabilities to perform their work in a minimum period through increasing the efficiency of its
accounting functions. Further, project management Microsoft is operating their business at the
global level. Therefore, it is important for the organisation to enhance their profits, this
determines through managing the funds of their departments. Microsoft can increase their
productivity and profitability of organization for a longer period. In this task, the integrated
framework of management accounting system is included to generate positive results by
combining various theories for the organisation. Moreover, this activity is useful to gain in-depth
information about the work which is done by them by justifying the reason which is adopted by
them for enhancing their performance (Lopez-Valeiras, Gomez-Conde, and Naranjo-Gil, 2015).
Some of the steps which are useful for the organisation to increase the performance of
management accounting system is as follow:
Changes that help top management to complete their work in organized ways are as follow
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 Controlling and Reporting- The first step that leads Microsoft to complete their work
in minimum factor relates to controlling and monitoring all business transactions. This
step helps them to take action that explores those possibilities and figures which works
as the best tactic for increasing their profits.
 Auditing of the work- This factor helps to deal with the case through systematically
completing the auditing function. Microsoft is a large organisation so they need to
make proper records of its function. This results that each group of customers to make
them by engaging it through targeting and completing their steps by engaging
In the last, by considering all the above factors and aspects it is easy for the organisation to
complete their work in minimum time. Moreover, this helps them to complete their work by
determining factors due to which organisation must require utilization of these tools such as
ABC, TQM and other to allocate cost-effective management accounting practice to complete
their work through various activities to define the cost of their projects. The major benefit which
is undertaken by the ABC tool relates to achieving management practice to increase their
performance by using several tools. The implement of ABC in organisation results that it is easy
all traditional practices will be removed that slow down the process of management accounting
system in the organisation (Kuznetsova and et. al, 2017). Further, this organisation helps them to
complete their work with more objects that are implemented for a longer period to increase their
efficiency by executing them with simple approach in the organisation, such as by allocating the
resources in organisation for systematically interpreting them.
The process of management accounting change is a process that engages the organisation for
completion of their work in minimum period. Prominence of the modern management system is
useful to make radical changes in management by using effective techniques. According to the
present marketing conditions most of the IT organisation engaging the organisation to perform
its operations at a global level. Microsoft is leading in the industry of information technology,
therefore with implement of modern management accounting system. This is easy for
organisation to complete their work in a shorter time by also providing them competitive edge
against local and rivals firms. Management accounting technique is divided into broad categories
through which they perform their work at strategic and operational level. The organisation
addresses several goals for the organisation through utilizing both of techniques. But in this task,
specifically towards the context of Microsoft, strategic method is more beneficial for
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organisation (Klychova and et. al., 2015). Example- Strategic technique for management
accounting system relates to the completion of their work through undertaking paramount
decision steps. The key factors of this organisation related with predicting the key factors due to
which management easily takes decisions to move towards the management for adopting a new
management technique. This leads organisation to adopt a system that deals with specific issues
for completing their work in organised way. This outcome results for organisation to benefit the
firm that is managed by implementing a new system for management accounting.
Comparing and contrasting various activities of the organisation to understand the uses of
management accounting system
Management accounting technique is beneficial for organisation which leads them to complete
their work. Microsoft and Inferior private limited, both are operating their business in the
information technology sector. So, it is important for them to manage their accounts with the
help of a professional system for completion of their work in an organised way. Therefore, to
overcome the financial challenges, both of organisation implemented a management accounting
system. This results from organisation achieve more success due to their constant efforts of
making the changes in the completion of their work (Grosu, Almasan and Circa, 2014). By
monitoring their performance, it is identified that organisations consume more time for the
completion of their work. On the other side, the financial department of both organisations
consider various aspect to delegate the responsibility of modern management accounting system
to enhance the performance of their work. Like to implement these with high efficiency both of
the organisation allocated their resources for performing different activities with more
productivity in the organisation. It determines that most of the activities of the organisation are
performed by them to complete their work significantly through managing their activities and
delegating it. According to the work capabilities and performance of the organisation.
On the other side, contemporary management accounting technique is involved by both
organizations. Inappropriate management accounting system generates several issues for the
organisation to manage their accounts with more efficiency and effectiveness. To overcome this
issue both of the organization formulates an effective list of management accounting system for
the completion of their work with more efficiency and effectiveness. With the formulation of this
list, Microsoft and inferior private limited selects the best alternative to complete which assists
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them to complete their work in the cost-effective way (Grabinskia, Kedziora, and Krasodomska,
2014).
With the development of technology, it expands their daily operations from a small level to the
global industries. This activity enhances that organisation can perform their work productivity by
dealing with modifications that are related to organisational capabilities and its performance. In
simple terms, it is stated that technology takes most of the organisation to enhance its products at
a global level. Due to this activity, it results that the profits for the organisation will be increased.
To manage them this is important for the organisation that they complete their work through
more productivity by executing the management accounting techniques. Both of the organisation
increases their business performance to complete their work in minimum time. BSC technique is
managed by both of the organisation to increase their performance because this helps the
organisation to complete their work by undertaking all the essential aspect that leads them to
perform their work with more efficiency by determining their purposes and objectives to
formulate effective planning activities to implement management accounting techniques in a
systematic and sequential manner
(Fullerton, Kennedy and Widener, 2014). The crucial factor which is implemented organisation
is to complete their work through managing various planning activities and applications to make
rational decisions to achieve organisational goals by using these techniques in an effective
manner.
Conclusion that are related to management accounting system to understand business
environment
Decision-making process is the most important for the organisation. This is related to completion of their
work with management accounting techniques. This results in a management accounting system large
organisation such as the Microsoft accomplish their work in a minimum time. This results to complete
their work with more efficiency through making effective strategic decisions that result in increasing
profits of organisation. By monitoring as well as pursuing all essential aspects to complete their work in
decision specific characteristic and internal organisation factors are also conducted in the management
accounting system for accomplishing the organisational goal at different stages. Another benefit which is
recruited by represent the importance of management accounting system. It is used by the organisation for
completion of their work in minimum time period to complete their work by determining various aspects
to make long term strategies. This is used by them to ensure the efficiency of their work due to which
organisation is able to complete their work by generating favourable result for the organisation to
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complete their work with more efficiency (Bellanca and Vandernoot, 2014). Management information
system is the most effective tool for inventory system that leads an organisation to manage their accounts
in proper manner. Price setting is a crucial decision for the organisation because it is directly related with
the sale of a product or service. By implementing management accounting system organisation decides
the reasonable price of their product. It results it is easy for them to enhance their performance by
considering all aspects that lead them to complete their work through undertaking aspects of current and
present scenarios that lead to increase profits by providing quality services to its products.
Specific outcomes that are learned from the above articles to understand management accounting
system
Management accounting system helps to enhance their business performance for all those sectors
that are performing their operation at a global level. Some of the studies that are outcome from
the above articles are mention in this report. Further, they are various benefit is used by them to
enhance my performance in most of the specific areas. There are various tools exists in the
organisation which lead management to complete their work through determining various
factors.
Good judgment- There are various approaches is learned while going through the study of
management accounting system. With the TQM, the first skill which is learned relates to the
improvement of overall performance. By learning the judgement skill, it is easy by the
organisation to increase decision-making process for making effective decisions.
Formulation of effective strategy- Strategy is the method by which the performance of an
organisation is increased (Ahmad, 2014). There are various functions are performed by so to
complete all the multi-task it is mandatory for organisation as an individual to complete them
effectively. To learn this skill proper and in-depth information about the balanced scorecard is
learned for monitoring the performance of all individuals.
Traditional approach- The accounting system is an essential part of the organization that
enhances its performance to fulfil the task systematically. Whereas, modern management
accounting system leads them to complete their work by using software. This statement analysed
that an organisation needs to focus on their work by conducting traditional approaches. With the
implementation of this activity, an organisation completes through developing relation between
various factors.
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Sustainability- Most of the existing organization are able to gain more sustainability in the
competitive market to retain and sustain their operations for a longer period. This activity is
learned through understanding the process of price setting and completion of their work by the
management accounting system that defines the value of their product.
In the context of the Australian firms, the factor which is learned with the understanding of
management accounting system relates to various factors. This factor leads them to complete
their work by making calculation. In this, it is for them to undertakes various aspect such as
identifying odd numbers and using mandatory methods such as multiplication and division of
their work according to the completion of their work (Ahmad and Mohamed Zabri, 2015). Along
with the proper fraction and mixed numbers of define their work in numerical value, decimals
and other fractions that are useful for complete their work while making calculations to deal with
problems for solving multistep equations. The last factor which is learned by them relates to the
equations, formulas the variable to complete their work through analysing graphs, tables, and
charts. These results all accounting firms leads management accounting system to complete their
work by analysing essential aspect to consider the essential information and to make effective
decisions.
CONCLUSION
Management accounting technique examined in the organisation to complete their work in
minimum time. The list of management accounting considers them to manage all of its functions.
These management techniques are used to increase their performance to complete their work in
extensive for managing all the operations of a management accounting system that benefited
them to generate favourable result from different activities. In this report, two case studies are
included. Here in this management accounting system inventory management and price setting is
also covered in this report. The method which is useful in this relates to getting the information
to complete their cost-effectively.
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REFERENCES
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