Management Accounting for Decision Making: Cancer Charity

This report analyzes management accounting principles for a cancer charity, focusing on a balanced scorecard approach to decision-making. The report provides a detailed breakdown of financial, process, customer, and learning perspectives. The financial perspective emphasizes the importance ...Read More

Running head: MANAGEMENT ACCOUNTING FOR DECISION MAKING
Management Accounting for Decision Making
Name of the Student
Name of the University
Author’s Note

1MANAGEMENT ACCOUNTING FOR DECISION MAKING
Table of Contents
Balanced Scorecard on Monthly Basis......................................................................................2
Explanation of the Measures of Balanced Scorecard.................................................................3
Financial Perspective.............................................................................................................3
Process Perspective................................................................................................................4
Customer Perspective.............................................................................................................6
Learning Perspective..............................................................................................................8
References................................................................................................................................10

2MANAGEMENT ACCOUNTING FOR DECISION MAKING
Balanced Scorecard on Monthly Basis
Financial Perspective Process Perspective
Measures Measures
 The profit is increased
 Growth in donation and grants
 Efficiency in using annual budget
 Using all resources with efficiency
 Enhanced cost structure
 Introducing and developing
innovative services
 Increase in awareness of the
available services among people
 Compliance with laws and
regulations
 Ensuring secure and safe
environment
 Enhancement in operational
standards
Customer Perspective Learning Perspective
Measures Measures
 Satisfaction to the patients and their
families
 Enhancement in accessing services
 Improvement in service quality
 Customized services for patients
 Increase in the resolution of
complaints
 Minimizing turnover of staffs
 Enhanced satisfaction of the
employees
 Reward and recognition initiatives
for staffs
 Delivering growth opportunities to
the staffs
 Enhanced skills, expertise and
abilities of the staffs

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Explanation of the Measures of Balanced Scorecard
Financial Perspective
1. Ensuring increase in profit is not considered as crucial, but a minimum amount of
profitability a charity like this small cancer charity needs to maintain in order to
remain operational (Boateng, Akamavi and Ndoro 2016). This requires the cancer
charity to ensure that their profitability is increased on every monthly basis as this is
crucial to uphold its overall stability in a good position. This can be done by tracking
the change in percentage of profitability on monthly basis. For example, there can be
a 5% increase in the current month’s profitability as compared to the previous month.
Alternative strategies need to be employed by the cancer charity in case it fails to be
profitable (Boateng, Akamavi and Ndoro 2016).
2. Donations and grants are the prime source of income of the cancer charity and
therefore, ensuring increase in these needs to be the greatest primacy for it. Increase in
donation is a good measure as this ensures the overall survival of the cancer charity.
This measure will tell that whether the charity is earning adequate income through
donations and grants in order to carry out its operations. Like profitability, this can be
measured by change in percentage. For instance, there can be 10% increase or
decrease in this in the present year (Colbran et al. 2019).
3. Efficient utilization of organizational resources is largely reliant of the development
of budget that includes the projection of income and expenditure. This is a good
measure because this helps in assessing the efficiency of budgetary control within the
cancer charity. This measures assesses the analysis of variance in budgeting. In the
cancer charity, this measure can well be used for assessing the increase or decrease in
the budget variance of one month as compared to the previous months. Variance

4MANAGEMENT ACCOUNTING FOR DECISION MAKING
analysis will tell the charity the difference between the budgeted income and
expenditure and actual income and expenditure (Sherr et al. 2017).
4. Efficient use of the available financial resource is desired from the cancer charity in
order to ensure smooth operations. Since these types of charities do not have access to
sufficient amount of funds, they needs to use the available resources carefully in order
to avoid resource wastage. Therefore, this measure tells about the efficiency of the
cancer charity is using the available resources. There are two financial ratios that can
be measured under this on monthly basis for measuring its efficiency; they are return
on capital employed and return on assets. Outcome of these ratios will be crucial for
the cancer charity to measure its efficiency on monthly basis (Anjomshoae et al.
2017).
5. Charitable trusts like this cancer charity have to incur both fixed costs and variable
costs while conducting the operations and this forms the cost structure (Boateng,
Akamavi and Ndoro 2016). This can be considered as a crucial measure as this will
help the cancer charity in the assessment of the proportion of fixed costs and variable
costs. Under this particular measure, it will be required for the cancer charity to
measure whether there is increase in the cost structure in the current month as
compared to the previous month. This is crucial as cost is associated with profit
(Krstić, Sekulić and Ivanović 2015).
Process Perspective
1. It is needed for the cancer charity to measure how many innovative services it has
developed and introduced on monthly basis. This needs to be considered as a good
measure as it is possible to cater to the needs of the patients in better manner with
innovative services (Dimitropoulos, Kosmas and Douvis 2017). One major way to
measure this is to keep track of the newly introduced innovative services in terms of

5MANAGEMENT ACCOUNTING FOR DECISION MAKING
numbers on monthly basis. In this way, the cancer charity will be able to know
whether there is any increased need to develop and introduce new innovative services
for the patients.
2. With the aim to inform the common people about the available services, the cancer
charity is needed to ensure the introduction of promotional activities in order to attract
increased number of people towards the organization. Increase in this awareness
needs to be ensured as this ensures the growth of the cancer charity. This can be
measured through two ways (Toklu 2017). First, the cancer charity needs to assess the
increase or decrease in the number of visitors to their facilities and official website on
monthly basis. Second, they can conduct surveys both online and offline basis for
gaining the number of people aware of the services and facilities of the organization
(Dimitropoulos, Kosmas and Douvis 2017).
3. There are certain legislations, laws and regulations that need to be adhered by the
cancer charity at the time to conduct its operations. Strict compliance with these laws
and regulations is paramount as violation of this can put the cancer charity in legal
issues. The most important way to measure the level of compliance with these laws
and regulations is to assess the increase or decrease in the number of cases associated
with the violation of these laws and regulations for every month (Kushner 2018).
4. One major way for the cancer charity to achieve operational excellence is develop a
secure and safe environment for its staffs, patients, their facilities and other visitors.
This is an important measure because a safe and secure environment is required to
satisfy all internal and external stakeholders of the charity. There are many ways that
can be utilized for measuring this on monthly basis; the cancer charity can track the
increase or decrease in the number of injuries and accidents in the workplace, number
of reported cases of medication error, percentage of people feeling safe within the

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building of the cancer charity, percentage of people getting physical examination and
others (Johansson and Larsson 2015).
5. Improved operational standards is required in case the cancer charity wants to be
successful or to maintain its success (Johansson and Larsson 2015). This needs to be
considered as a crucial measure because enhanced operational standards ensure the
patients of the charity receive quality facilities and services from it. The most crucial
way to measure this on monthly basis is to assess the level of compliance with all the
required standards of operations and to assess whether there is any case where the
charity fails to maintain its compliance with the operational standards (Sands, Rae and
Gadenne 2016).
Customer Perspective
1. The aim of the cancer charity is to satisfy the needs of the patients and their facilities
with their services and facilities; and this puts the obligation on the charity to take into
account the desires and needs of the patients and their families. This can be
considered as a good measure as the level of satisfaction is positively associated with
their performance. Certain ways can be used to assess this; the charity can check the
number of cases where the patients’ families are unsatisfied or satisfied; or the charity
can conduct surveys by taking the views of the patients and their families (Manville et
al. 2019).
2. Since the key objective of the cancer charity is to help the cancer patients and their
families with the required medical services and resources, the charity needs to ensure
that these patients have easy access to these services, facilities and resources of them.
Improved access to the services and facilities of the charity is a crucial measure
because the satisfaction of the patients and services is associated with this. For
measuring this on monthly basis, the cancer charity can take feedbacks from the

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patients and their families on the fact that whether they are satisfied or not with the
services and facilities provided (Al-Hosaini and Sofian 2015).
3. Bringing continuous improvements in the quality of services provided is crucial for
the survival and success of the cancer charity. This measure is an important one
because of the fact that the families of the patients assess the quality of services
before taking them. This aspect can be measured through the introduction of rating
system of the provided services and facilities of the cancer charity. This will help the
charity to identify the areas with lowest rating and it means these areas require
additional consideration for improving the overall quality (Catuogno et al. 2017).
4. Since the main operation of the cancer charity is involved in providing services and
supports to the cancer patients, this can be done in better manner by providing the
cancer patients with the services customized as per their needs and demands. This is a
crucial measure as this ensures satisfying the unique requirements of the patients and
their families. One crucial way of measuring the progress of this is to assess the
number of customized services provided to the customers in order to cater to the
needs of them. Therefore, the number of newly developed customized services is the
way to measure this (Sri, Lestari and Nurcholisah 2015).
5. Receiving complaints from the customers is a normal process for the service-provider
organizations like cancer charity and the need is to effective tackling of these
complaints received so that timely resolution can be provided to the patients’ families.
Increased timely resolution of complaints is a crucial measure because this is
associated with satisfaction of the patients and their families. In order to measure this
on monthly basis, the cancer charity needs to assess whether there is an increase or
decrease in the number of complaints resolution in time. This is crucial for forming an
operational complaint management framework (Soysa, Jayamaha and Grigg 2016).

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Learning Perspective
1. Since the cancer charity is a charitable not-for-profit organization, staffs do not
receive any wage from it; therefore, this is a crucial job for the management of the
cancer charity to retain the staffs (Arena, Azzone and Bengo 2015). This measure is
important as the charity needs to motive and encourage its employees in such a
manner so that they agree to work for it without any expectation. One important way
to measure this on monthly basis is to assess whether there is increase or decrease in
the employee turnover as compared to the previous year. The outcome can be
presented in the form of percentage.
2. Satisfied staffs are always ready to give their full effort and commitment towards the
organizations and therefore, the cancer charity needs to ensure increase in employee
or staff satisfaction for gaining their full commitment. The staffs of the cancer charity
should receive career growth opportunities and learning opportunities from the
organization so they can be satisfied. One major way to measure this on monthly basis
is to conduct surveys on the employees through questionnaire that will contain
relevant questions associated with employee or staff satisfaction. Increase in
employee satisfaction reduced staff turnover and staff attrition (Kalender and Vayvay
2016).
3. In order to motivate the staffs, the cancer charity can employ the process of
recognizing and rewarding the staffs. In this process, the charity will identify the
staffs with superior performance so that they can be rewarded in front of everyone.
This measure is crucial as this plays a crucial role in identifying the good performing
staffs. In order to measure this on monthly basis, the cancer charity can assess the
number of employees recognized and rewarded in the current month as compared to

9MANAGEMENT ACCOUNTING FOR DECISION MAKING
the previous month. This is an effective manner for motivating and encouraging the
employees with superior performance (Muda, Erlina and AA 2018).
4. In order to provide the staffs with learning and personal development opportunities,
the cancer charity needs to make it sure that the staffs are receiving opportunities for
their personal growth. This measure needs to be considered as an important one
because developed and skilful staffs are essential for delivering value services and
facilities to the cancer patients. In order to measure this on monthly basis, the cancer
charity needs to assess the increase or decrease in the number of newly introduced
career growth programs for its staffs as compared to the previous year (Hansen and
Schaltegger 2016).
5. Since staffs are the most valuable assets within the organizations, the organizational
excellence is reliant on the enhanced skills, expertise and abilities of its staffs.
Increase in the skills, expertise and abilities of the staffs is a crucial measure as skilful
expert staffs are required for catering to the unique needs of the cancer patients. In
order to measure this on monthly basis, cancer charity needs to assess increase or
decrease in the number of opportunities provided to its staffs for enhancing their
skills, expertise and abilities. At the same time, the method of performance appraisal
can be adopted by the cancer charity in order to assess the skills, expertise and
capabilities of its staffs (Muda, Erlina and AA 2018).

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