Effective Planning Tools for Managing Accounts Part 2

Management accounting

TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................................................................2
INTRODUCTION...........................................................................................................................3
Explain management accounting and give the essential requirements of different types of
management accounting systems................................................................................................3
Evaluating management accounting systems and management accounting reporting is
integrated within organizational processes.................................................................................4
Benefits of management accounting system...............................................................................4
Calculating costs using marginal and absorption costing and preparing income statement.......5
Monetary difficulties are examined............................................................................................8
The use of a planned technology...............................................................................................11
PART 2..........................................................................................................................................12
The benefits and drawbacks of different kinds of preparation instruments..............................12
Organizations are developing managerial accountancy systems in different approaches, as
seen through comparisons.........................................................................................................13
Assessment of a fiscal problem.................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................17

INTRODUCTION
Management accounting is the study of maintaining reports about business activities that
help the top-level management in order to make long term and short term business decisions. By
identifying business goals and strategies the managers of company make better and evidence
based strategic decisions. The case study will give detailed information about Sollatek, UK, the
manufacturing company deals in tubes and valves. The report will explore role, methods,
planning tools of management accounting systems. Further the case study will outline principles
and types of management accounting systems. In addition to this, the present report will give
types of managerial reports. Managerial accountancy is among the most efficient techniques for
assisting an enterprise in recording and summarising numerous monetary transactions which
occur inside a division (Andarwati, Nirwanto and Darsono, 2018). The major goal of accountants
and financial management is to gather numerous pieces of statistics from diverse suppliers in
order to ensure that finances are capable to satisfy the corporation's needs. It is carried out with
the intention of achieving an organization's short- and long-term aims and outcomes. There seem
to be a number of important factors to consider in order to maximise your yield in the coming
years. This method of production intends to provide important data regarding different aspects of
financial platforms, which are excellent resources for keeping track of important transactions in
the division. Aside from that, many forms of accountancy disclosure practices are considered
while analysing their advantages to the Sollatek organisation. In the same way, multiple pricing
strategies are employed to compute operating revenue. There are benefits and drawbacks to
employing a variety of preparatory techniques for budgeting process. Finally, a comparative with
other organisations is made to see how a managerial structure could deal with fiscal challenges
that develop in a company.
Explain management accounting and give the essential requirements of different types of
management accounting systems
Management accounting
It is the presentation of accounting related information to management of the company in
order to formulate the various business policies and assist in it daily business operations (An
overview of management accounting, 2021). It also means that it helps the managers to performs
all business related function including organizing, planning, controlling, budgeting. The main

objective is to avoid errors and minimize losses in order to make profit, it will ultimately
increase productivity.
Role of management accounting
The most important role is to analyse cost to determine the existing company expenses
and give relevant and proper suggestions for the future requirement and business activities
(Mahmoudian and et.al., 2021). After cost and budget analysis, the management team of the
company can make decisions which is beneficial for the firm. In order to direct financial
processes the managers of the company identifies past trends and predict future requirements for
decision-making process related to spending, budget, costs and sales.
Management accounting system and its role
The systematic process of control used by management team in order to influence
members to achieve business goals and objectives within the company (Massicotte and Henri,
2021). The company uses this system to save time and costs as it improve financial visibility and
develop asset and inventor management. A major importance of this system is that it gives high
flexibility and enhance decision-making process and minimizes various errors in terms of
accounting.
Role- This system plays a vital role in forecasting future business needs and for making plans
such as strategic management accounting and market study. With the help of this system, the
management team can analyse and maintain reports such as cash flow statements, liquidity and
others.
Evaluating management accounting systems and management accounting reporting is integrated
within organizational processes.
 This system and process helps managers to make business decision with the help of
budgeting in order to control unnecessary control (NGUYEN and NGUYEN, 2021).
Comparing the budget to actual expenses to evaluate the financial information.
 It provides brief information of company's resource flow and divides what is beneficial
and detects errors to form long term strategies to measure health of organization and on
the basis of that make effective production and budget decisions.
Benefits of management accounting system
Compiling and designing- In order to meet the requirements of business, the firm should
design and compile the accounting reports and statements with respect to past, present and future