Requirement of Management Accounting Systems
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Added on 2021-02-19
Requirement of Management Accounting Systems
Added on 2021-02-19
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Management Accounting
Table of ContentsIntroduction......................................................................................................................................1LO1..................................................................................................................................................1LO2..................................................................................................................................................5LO3..................................................................................................................................................8LO4................................................................................................................................................12CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
IntroductionManagement accounting also called managerial or cost accounting that help the manager toanalyse various operational activities. It helps in developing financial reports which furtherrequired by the manager in order to take effective decisions and it also beneficial for theinvestors who take their decision as per the financial position of the company (Baird, Schoch andChen, 2012). Management accounting help the organization to increase their operationalefficiency as well as effectiveness, which further increase the productivity or profitability. Thesepractices automatically generate more revenue for the organization. For the better understandingof these concepts, this report choose the medium size company. Brightstar is UK based financialservices Provider Company that established in 2011. They provide various financial solutions totheir clients. Naked wines in one of the client company of the Brightstar, which consult regarding theirfinancial solution. This report includes the various topics such as management accounting andessential requirement of management accounting systems. It also includes the different types ofaccounting reports, benefits of management accounting, costing techniques, advantage ordisadvantage of various planning tools that helps in controlling budget. In addition, it includesthat how organization solve their financial problems with the help accounting system orreporting. Manager have to use appropriate way to resolve problems for the sustainabledevelopment or success in the future. LO1Organizational overview: Naked wines is an independent wine maker company, it was foundedin 2008, and founder of the company is Rowan Gormley. UK based organisation provide theirproducts to the customers on wholesale price and situated in Norwich, United Kingdom. Fortheir internal operational activity, naked wines consult with the Brightstar Company that providethe financial solutions (Naked wines, 2019). Management accounting: It is the process of preparing management report, which help themanager to develop accurate financial report. It further helps in building effective strategy for the1
future decisions that is beneficial for the organization. With the help of management accounting,manager can efficiently take daily basis decision, which helps in formulating operational activity.Manager of Naked Wines Company use the management accounting to enhance their internalefficiency which is beneficial to develop their financial report by using various financialinformation. Financial information useful for the stakeholders who take their decision regardingfurther investment is totally based on the management report. Management accounting system: It include various practices, which help the organisation tomaintain their operational activities. Manager try to manage their inventory level that help inreducing waste along with product cost and it will further help in increasing organizationalefficiency or effectiveness. Manger of Naked wines use the different types of managementaccounting system to enhance their operational functions, which increase productivity as well asprofitability. Inventory management system: It is the system or software, which help the organization totrack their inventory level on regulation basis that helps in preventing shortage of material. Ifcompany face the problem regarding shortage of raw material for the production then it willnegatively affect the manufacturing process (Barth and et.al. 2012). It automatically affect theprofit margin of the company. In Naked wines, manager use this management system to keeptrack their stock level in the warehouse. It is essentially required to analyse their inventory levelbecause over stock cause the wastage that generate high product cost and low availability ofstock cause the shortage which affect the production. Cost accounting system: It is also called costing system because with the help of this systemmanager can identify each unit cost and further implementation helps in reducing and controllingfor the whole period of manufacturing. It is essentially required by the organization to reducetheir product cost that automatically generate the high profit. Manager of Naked wines companyuse the cost accounting system for the analysis of their cost. With the help of this system,organization reduce their product cost, which increase the productivity as well as profit margin.It also help in maintaining same cost for the entire manufacturing process and try to reduce it. 2
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