Management Accounting and Reporting: Types, Techniques, and Benefits

This document provides an overview of management accounting and reporting, focusing on the types of accounting systems, techniques used for reporting, and the benefits of different accounting tools. It also discusses the integration of management accounting with organizational procedures. The document includes examples from Capricorn Wealth Management Limited and explores topics such as cost accounting, price optimization, job costing, and inventory management. It also examines various management accounting reports, including performance reports, budget reports, account receivables aging reports, and cost managerial accounting reports. Additionally, the document discusses the advantages and disadvantages of planning tools used for budgetary control and how organizations adapt management accounting systems to address financial problems.

Management
Accounting

Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1Management accounting and requirements of diverse types of accounting.........................................3
P2 Diverse ways used for management accounting reporting..................................................................4
M1 Assessment of advantages of numerous management accounting system.........................................5
D1 Management accounting system and reporting integration with respect to organization procedure...6
Task 2..........................................................................................................................................................6
P3 Costs using appropriate methods of cost analysis...............................................................................6
M2 Techniques of management accounting and financial reporting documents......................................7
D2Financial reports which relates to modify many business actions.......................................................7
Task 3..........................................................................................................................................................8
P4Benefits and drawbacks of planning tools used for budgetary control.................................................8
M3Different planning tools for forecasting and preparing budgets.........................................................9
TASK 4.......................................................................................................................................................9
P5Organizations are adapting management accounting systems to respond to financial problems..........9
M4Management accounting with regards to financial problems in terms of sustainable success..........10
D3 Planning tools to solve all financial problems..................................................................................11
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................12

INTRODUCTION
In terms of Management accounting it refers to the name by managerial accounting. It is defined
as accounting system which involves previous accounts and management reports that are
required by the directors to make daily choices as well as to make short term choices. This
accounting system is essential to make in-house verdicts with respect to the business
organization. It involves non – financial as well as financial information for making reports.
Eventually there is no precise time to formulate and use these executive reports; a business
association can use this whenever they need it (Curry, 2020). The accounting system varies from
the financial accounting organization and the reason behind this is that it is cooperative for the
internal aspect of the business. The below report is based on Capricorn wealth management
limited company. It was established in year 2008. The company’s headquarter office is at
Hammersmith London United Kingdom. It is involved in providing wealth as well as financial
guidance to all consumers and at the same point of time they provide various financial services
on products loans and many more. The below report involves information about the management
accounting its various types and benefits. Besides this the focus on managerial reports,
techniques, their advantages and disadvantages. It also includes the way in which societies
overwhelm from financial disputes with the effective operation of numerous accounting
techniques.
TASK 1
P1Management accounting and requirements of diverse types of accounting
Management accounting is defined as the mixture of two disputes which are accounting
as well as management. It refers to a method of accounting which is in relation with the
management of inner part of businesses. The system is supportive in making administrative
reports that are desirable by the organization to make significant guidelines and tactics for future
aspects. It is not compulsory for the corporations to preserve the accounting system. It totally
depends on the society that whether they need it or not. Ultimately the accounting structure has
its own status in the internal partner businesses. There are several types of accounting system
which is further explained as below:-
 Cost accounting system: - It refers to a thoughtful system which is necessary in
evaluating the charge of goods including all the cost like variable price, fixed rate and
many more. It is very significant for the organisations to have an approximation about the
rate of products and services and the reason behind this is that projected cost helps in
checking about the profit and loss on goods and services (Mirbagheri Roodbari and
Kordestani, 2020). In terms of selected company they use this accounting system in order
to check the cost of numerous financial product and services and it also helps in
concentrating on those categories of services which are beneficial in future.

 Price Optimization system: - It is defined as a outline in shaping the overall price of
product and services which are necessary for both their customers as well as
organisations. It helps in investigating the appraisal of customers on different level of
pricing. Mainly the purpose behind this accounting coordination is to offer elements
which help in value setting. In relation with taken company they used the system in
setting all prices at the level which is useful for their business organization and also for
consumers.
 Job costing system: - It refers to the system of computing total cost that happens in
providing services and products and after this conveying the charge to each individual
unit of goods and services. It is better suitable in those groups that offer multi-purpose
products and services (Hussein Mohammed and Siddig Mohammed, 2021). In context
with Capricorn wealth management limited they offer many economic goods and services
so it is necessary for them to make an appraisal regarding each individual units cost. In
this state the secretarial structure helps them in investigating the cost of diverse financial
product and services.
 Inventory management system: - It is defined as one of the most significant accounting
system. It is in relation with the following the position of products and services. Through
the help of this accounting scheme organisations can form whether the accessibility of
products and services mainly the management system works energetically in entire
supply chain management. In context with Capricorn wealth management limited they
apply the system in order to track these facilities and products. It helps in inspecting the
position of financial services and products like if company wants to trail the debt loans
amplification then this system will support them in checking the position of that service.
P2 Diverse ways used for management accounting reporting
All accounting reports are significant for the industry but management accounting reports
have their own importance in context with the company. The accounting reports play significant
role in terms of the internal supervision of a corporation (Taschner and Charifzadeh, 2020). It
supports managers in making important choices and approaches. These reports involve monetary
as well as non- monetary facts. In terms of the selected company they prepare different kind of
reports which are further bean explained as below: -
 Performance report: - It is defined as the measuring of performance in terms of this
management accounting. Performance report refers to the estimation of presentation of
both companies as well as employers. It decreases the difficulty in determining which
employees are good for getting rewards and which one or not. In terms of the selected
organization they implement these reports in evaluating the presentation of both
association and employees. It helps them in examining the performance of each
individual activity.
 Budget report: - It refers to the inner report which is necessary for management in
associating the projected performance with the definite presentation. Besides this it also

comforts in making future strategies and plans for organizations. This report creates an
assessment of overall expenses and incomes with regards to the particular time period
and organisations follow this in order to attain their objectives. In context with Capricorn
wealth management limited they use this report to relate their real monetary performance
in comparison with the budgeted objectives. It helps them in making operative future
tactics if their performance is beneath the budgeted performance.
 Account receivables ageing report: - It is defined as the report which involved all those
information’s with regard to the credit dealings. It is necessary for those business
organisations that make their connections mostly in the credit fund. It is helpful for the
finance subdivision in examining about how much money is unpaid in the marketplace by
various customers (Guan, An and Liang, 2020). Furthermore the report involved
statistics also on which credit transactions took place which eliminates the difficulty of
credit calculation. In terms of Capricorn wealth management limited organization they
organized these reports in checking the entire collection from the consumers. It also
brings the form of transparency in credit collections from the market.
 Cost managerial accounting report: - It is defined as the report which provides an
outline in testing both profit and loss from diverse actions. It helps in computing all the
expenditures before marketing the product and after that comparison of total expenditures
with the money from retailing. If expenses are more than selling volume then it would be
a loss for the company and if it is more than the expenses than it would be profit for the
organization. In relation with Capricorn wealth limited company they used these reports
in accessing the profit and loss and to make the future strategies and plans if there is any
kind of loss.
M1 Assessment of advantages of numerous management accounting system
Advantages of cost accounting system: -
 It is cooperative in making assessment of cost of all the product and services which an
organization offers (Mohd Jamal, Tayles and Grant, 2020).
 It is also helpful in finding the reasons which are in relation with the high cost that is
occurring in the procedure of product and service
Advantages of Inventory management system: -
 It is valuable in following the status of numerous kinds of product and services.
 It also helps in saving cost and time
Advantages of price optimization system: -
 This system help companies in analyzing the level of price which is advantageous for
both parties whether their customers or company.
 It provides a basis to evaluate the customer feedbacks at different pricing level.

Advantages of job posting system: -
 It is helpful in calculating and allocating each units cost individually.
 It helps in keeping constant checking on all the activities of business especially in terms
of cost occurring activities
D1 Management accounting system and reporting integration with respect to organization
procedure
The addition of management accounting reporting with the secretarial system is
significant in terms of the organizational procedure. The reason behind this is that both have a
distinctive association with each other. If a corporation wants to formulate some kind of
managerial reports then it is crucial to have data ( Abdullah, 2020).In the absenteeism
companies won’t be able to make reports and with respect to this they can’t take any kind of
futuristic decision. In relation with selected organization they prepare dissimilar management
reports with the help of diverse accounting tools and techniques. This decreases the complication
level in preparation of accounting reports.
Task 2
P3 Costs using appropriate methods of cost analysis
Absorption costing technique
July August
Variable cost 40000 60000
Fixed production cost 10000 15000
Total cost 50000 75000
per unit cost 25 25
Income statement
Particulars July August
Sales 82500 176000
Less: cost of goods sold 37500 80000
Variable cost 40000 60000
Fixed production cost 10000 15000
Closing stock 12500 7500
Opening stock 0 12500
Gross profit 45000 96000
Add/less: Under/over absorbed fixed cost 5000 0
Less: selling and distribution cost 18000 18000
Net profit 32000 78000

Marginal costing technique
July August
Variable cost 40000 60000
Per unit cost 20 20
Income statement
Particulars July August
Sales 82500 176000
Less: marginal cost of sales 30000 64000
Variable cost 40000 60000
Closing stock 10000 6000
Opening stock 0 10000
Contribution 52500 112000
Less: fixed production cost 15000 15000
Less: selling and distribution cost 18000 18000
Net profit 19500 79000
M2 Techniques of management accounting and financial reporting documents
Management accounting tools and practices are crucial in order to create the monetary
reports and declarations. The organizations need to formulate all the leaflets like profit and loss
statement, balance sheet and many more. With the use of accounting techniques and tools the
reason behind this is that they provide financial data which are necessary in order to prepare the
financial reports (Le, Vu and Tran, 2020). In terms of an organization they prepare all the
financial accounts with the help of dissimilar accounting techniques and approaches because
financial data that is needed in order to make financial statements becomes obtainable from the
management accounting tools.
D2Financial reports which relates to modify many business actions
Financial reports imitate all kinds of commercial activities in such a way that it becomes
easy to understand. With the use of financial declarations like balance sheet, profit and loss
statement business organizations can crisscross about the financial place. This financial news is
linked up with the business happenings and the reason behind this is that all the information in
these reports comes from the business activities. Mainly the financial report shows the business
activities in the financial form. The persistence behind this is to do the evaluation of organization
as well as to show the external parties like shareholders. In relation with selected company they
prepare many financial reports like in the form of income statements in order to check the
efficiency level of the business activities.

Task 3
P4Benefits and drawbacks of planning tools used for budgetary control
Budgetary control is defined as a method which helps in expressing the upcoming
financial presentation and use by evaluating all the past budgets. This technique is used by the
managers in order to control and monitor financial actions as well as the cost of an accounting.
These controls play a crucial role in any business organization because it helps the senior
managers to accomplish and operate the focus of operations in such a way that it could increase
the chances of making more profits (Kostić and Sedej, 2020). Such rules provide assessment in
terms of the overall expenditures on income within the organization for the financial period
along with the financial place in the competitive world. The managers of organization consider
different factors in order to set non-financial and financial targets with the purpose of
coordination and controlling overall financial activities within different level of the partners.
Ultimately the advantages as well as the disadvantages of various type of planning tools which
are useful budgetary control are further being explained as below: -
 Contingency planning: - It is used to manage numerous type of risks that are linked with
the unexpected situations or the immediate situation that may arise while performing
different operations in the business organization .It helps in implementation of various
plans, approaches in order to overcome different issues that arise at the marketplace.
This planning tool helps the company also to implement various backup plans, tactics in
order to reject the obstacles while performing daily operations. The advantages of
contingency planning are that it provides profits to the selected organization by reducing
the different chances of risk, failure by implementing the backup plans. It also helps in
taking corrective actions with regards to any unexpected obstacle in the Capricorn
wealth management limited company (Kim, 2020). There are certain disadvantages also
while formulating different backup plans for the emergency situation it can lead to create
the struggle across the ideas of various managers in order to deal with the respective
situation. It also involve large amount of costs and time consuming process because the
organizational managers need to be get rationalized with the change in situations.
 Flexible budget: - It is defined as a tool and technique that helps in making variations in
the budget at the time they get occurred. In relation with the company the managers
prepare such budget for those types of processes which are valuable in nature there are
certain advantages as well as disadvantages also. With the help of flexible budget
coordination takes place across different activities in the company and it also provides
accurate outcomes as it covers various types of ranges in terms of different activities on
separate basis but at the same point of time it is difficult to administer the flexible budget
because it involve many variables and also at the same point of time it becomes difficult
to understand such project because it does not remain fix at specific time.

 Forecasting tools: - It helps in making a prediction regarding the future aspects by
evaluating the process as well as present budgets and circumstances. These types of tools
are used to anticipate the results and future campaigns (Brukhanskyi, 2020). In relation
with Capricorn wealth Management Company the technique offers the managers to
guide and guess the future needs as well as the requirement by evaluating all the
financial declarations, doing the calculation of certain ratios and going through the past
evidence. There are different advantages and disadvantages of forecasting tool. It helps
the company by keeping their clients glad with the help of providing them the accurate
and estimated predictions based on their budgetary reports and this tool can provide the
benefit in formulating and analyzing better future strategies by considering the effective
and valuable financial information. There are certain disadvantages also as it is very
difficult activity for the managers to assess the production on the basis of accurate future
and formulation of plans. The information which is gathered by the managers across
different departments which may be not effective to make certain plans and policies for
future perspectives.
M3Different planning tools for forecasting and preparing budgets
Budgetary control defines an accurate analysis of specific organization with the help of
providing different tools and techniques that helps in preparation and construction of the future
financial presentation and all the objectives by evaluating the past budgets. With the help of this
Capricorn wealth management limited company can plan all the outcomes and financial position
with respect to the future. There are different planning tools like contingency planning,
forecasting tools and so on. In relation with contingency planning they are used to express
various strategies and schedules in order to avoid the obstacles while performing day to day
operations and also decreasing the uncomplimentary situation that may arise in the business
organization. In terms of flexible budget they are used to prepare diverse budgets in relation with
those operations that are valuable in nature. The forecasting tools are further used to provide the
guidance to all the managers in order to predict and estimate the future requirements by
evaluating certain financial statements, calculating the ratios and available past data.
TASK 4
P5Organizations are adapting management accounting systems to respond to financial problems.
Financial problems: It is related to the issues that are faced by company in order to meet
standardized outcome that is related to debt and credit. There are different financial issues that
affect the credibility and operational working in balanced mode and on order to get from this
business worked with different strategies so that adequate outcome is developed in efficient
mode ( Sepasi and Ramezani, 2020).. The Capricorn Wealth Management take support of
various accounting system to deal with financial problems and some of them are as explained
below as:
 Problem of cash flow: It is related to the problem with this organization is not able to
manage its asset and liabilities as with this both profit and loss are difficult to measure.

For this The Capricorn Wealth Management having problem to manage capital
expenditure that is required to attain higher values. In this company is not able to pay
their debt as they also have to pay government tax, remuneration payment, employee
salary that reduces the profit generation of business.
 Risk management: It is essential aspect with this substantial growth and development of
business is affected as ability of business to manage uncertain risk is not must responsive.
The organizations have made selective strategy and policies to achieve profitable
outcome as by eliminating risk credibility. The Capricorn Wealth Management leads to
face instability with respect to performance management as management is failed to
develop certain strategy in formulated manner.
 Money management: It is a technique that is used to maintain budget, saving, tracking,
spending as with these monetary resources also get complied. It assists to make perfect
balance in between the availability of resource with this maximized outcome is perceived
in timely frame. The Capricorn Wealth Management develops different strategy to attain
perfect balance in between credit management.
Financial governance: It is resulted of certain way through which organization get manage,
collect, gather, monitor and control different financial functions so that ability to cope up with
future challenge is resulted in favored mode. It is also be responsive to attain adequate balance in
between accuracy in between financial statements.
Management accounting approach: It is an approach that is used by the business and its
management to make effectual utilization of all required resource so that working is processed in
favorable manner. Below is the discussion about different approach and it is as explained as:
 KPI: It is an approach through which The Capricorn Wealth Management standardized
its performance as with certain purpose. For this ability to achieve effective outcome as
by maintaining sustained focus is processed in favorable manner. In support of this
approach management is able to develop and design strategic goals and target that
replicate to long term success and sustainability with higher attentiveness.
 Benchmarking: It is a technique that is used by an organization to measure and control
its performance in prospect of its competitors. In this management set sustained target
and objective and implement various strategy and initiative to achieve it so that business
credibility is perceived with its suitability. In addition, it also assists to identify suitable
opportunity through which working performance is improvised as by reducing the loop
holes.
M4Management accounting with regards to financial problems in terms of sustainable success
Management accounting methods like key performance indicators and so on plays a very
significant role in the selected company in order to achieve supportable success by enabling
different kind of strategies which ultimately helps in decreasing all kinds of issues that lead them
towards the sustainable success. Capricorn wealth management limited company assesses the
approach of key performance indicators in terms of comparison of the activities with the
competitors and in the same industry also to decrease the obstacles which lead towards the
success of the organization.
D3 Planning tools to solve all financial problems
The planning aspect helps in determining strategies for future aspect in order to maintain
effective functioning of all operations. In terms of the selected company they face many

problems due to unexpected situation. The management department uses different planning
equipment like flexible budgets and so on. It helps in assessing the unexpected issue to enhance
the level of efficiency and enhance the probability in order to solve all kind of financial issues.
CONCLUSION
From the above report it has been concluded that management accounting plays a crucial
role in companies in order to achieve all the objectives. It involves different systems like job
costing, price optimization and many more. There are certain reports which the selected
company uses like budget reports, cost managerial accounting and so on. The various kinds of
approaches like key performance indicators and benchmarking is also used by the company.
REFERENCES
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MANAGEMENT ACCOUNTING. The Institute of Accounting, Control and Analysis in the
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