Management Accounting: Purpose of Budgetary Control and Key Performance Indicators

Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
QUESTION 1...................................................................................................................................1
QUESTION 2...................................................................................................................................3
QUESTION 3...................................................................................................................................3
QUESTION 4...................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Management accounting is the process where managers of the company evaluate the
business cost, help in maintaining financial report and beneficial for managers in decision
making process (Bromwich and Scapens, 2016). For the better understanding of management
accounting, this report select the Toshiba company which is multinational conglomerate which
deals in electronic items and based in Tokyo Japan. This report include the various topics such as
purpose of budgeting control, advantage or disadvantage of different budgetary control system.
Along with this, evaluate that how management account use the KPI in internal processes.
MAIN BODY
QUESTION 1
Purpose of budgetary control:
 Main purpose of budgetary control is to done effective planning.
 Make co-ordination among the different departments.
 Is to improve the communication among the staff members.
 Control over the business activities which helps in providing final outcomes.
Advantage of disadvantage of following budgetary control system:
Cash flow budgeting: It is the estimation of cash receipt and cash expenditure of the
specific time period. This estimation can be done on monthly, quarterly or yearly basis.
Management accountant of Toshiba company apply this budget which has some advantage and
disadvantage:
Advantage Disadvantage
With the help of it, business able to
communicate their financial position with
stakeholders. It helps in identifying potential
deficit of the business.
Cash budget limit the spending power which
create difficulty to execute the operational
activities. It also reduce the capability to build
credit profile.
Zero Based budgeting: It is the accounting technique which help the manager of
Toshiba to estimate the cost of each unit from the “Zero Base”. It helps in providing accurate
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