Usage of Management Accounting System in Dealing with Financial Problems

UNIT 5 - MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO4..................................................................................................................................................3
Usage of management accounting system in dealing with financial problems.........................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
This report provides an insight into the approaches which is being used by the company
to deal with financial problems.
LO4
Usage of management accounting system in dealing with financial problems
Management accounting system helps in business to take various important decisions that
are essential for smooth functioning of organization. It is widely used to determine cost, profit,
irrelevant elements of businesses, etc. There are several financial problems that involves
inadequate availability of working capital, offering wrong discounts, mismanagement and
pricing, etc. MAS plays several roles in tackling these issues in effective pattern so that desire
outcome can be obtained.
Proper utilization of resources in important for reaching success in specified duration. it
comprises appropriate inventory management so that company can effectually monitor its in and
out bound activities (Purnamawati and et.al., 2020). Misuse of confidential security and
fraudulent activities are as well prevented with proper implementation of inventory management
system. There are various strategies that company need to execute for implementing course of
action. The biggest financial problem is that even large organization faces is proper estimation of
pricing strategies.
Financial problems such as access to funding, debt repayment, in consistent cash flow,
urgency of monetary resources, etc. The issue of sources of fund is usually faced by all types of
sector as they may need money for expansion, takeover, working capital, etc. It is not possible to
provide accurate estimations of resources therefore there may be emergency in expenditures that
might not avoidable by enterprise (What is cost saving? 2021). In order to have careful planning
organization need to forecast budget for meeting contingent requirements.
MAS importance in dealing with important aspects of firm
ABC
This is crucial part of management accounting as it play role in identifying crucial activities
of organisation and assist cost of each practice. In addition to this, it is basically process of
assigning overhead and indirect cost to products & Services. This contributes in large extent in
leading organization towards obtaining better financial position (Ugoani, 2020). It helps in