Report on Accounting Management System for Williams Jet Tenders

This report provides a comprehensive analysis of the accounting management system, focusing on its application within Williams Jet Tenders. It explores various types of accounting systems, including traditional, transfer pricing, throughput, and lean accounting, and discusses different methods for managing accounting reports, such as marginal costing and decision-making. The report delves into cost calculation techniques, comparing marginal and absorption costing methods. It also examines the merits and demerits of various planning tools and compares different approaches to management accounting for maintaining financial stability. The study highlights the importance of financial planning, budget development, and performance measurement in achieving effective accounting management, providing a detailed overview of the subject matter. Additionally, it covers the financial reports and their preparation, emphasizing their role in business activities and decision-making.

MANAGEMENT ACCOUNTING
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Executive Summary
The entire study has focused on the accounting management system. It will shade on the report
of management accounting and their importance in the business venture. It will provide detail
information about the various kinds of management system of accounting. Different methods for
managing the account report would be provided throughout the study. In order to complete the
task, Williams Jet Tender has been selected. It is a boat manufacturing organisation. Proper
calculation of costs would be given. In order to analyse the study, accounting theory would be
emphasised in the appropriate way. The entire study will provide clear perception about the
usage of planning tool in order to manage the accounting system of the organisation.
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
LO1..................................................................................................................................................3
P1 Description of accounting management and various types of system of accounting with
example............................................................................................................................................3
P2 Different kinds of methods for managing accounting report.....................................................5
Task 2...............................................................................................................................................7
LO2..................................................................................................................................................8
P3 Calculation of costs by using techniques....................................................................................8
Task 3.............................................................................................................................................10
LO3................................................................................................................................................10
P4 Demerits and merits of various types of tools of planning.......................................................10
Task 4.............................................................................................................................................13
LO4................................................................................................................................................13
P5 Comparison in different approaches of management accounting for maintaining financial
problems........................................................................................................................................13
Conclusion.....................................................................................................................................14
Reference list.................................................................................................................................16
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From: Officer of accounting management
To: Authority of organisation
Subject: Accounting management system in Williams Jet Tenders
Introduction
Management accounting is the professional procedure, based on which, the authority of
organisations is able to take their decision as per the requirement of venture. Management of
accounting is the system, which helps to control financial condition of the enterprise in
contemporary era. It assists to provide financial report to the authority of the organisation for
understanding their position in the merchandise market. At present, it is necessary to keep all
kind of information related to the venture. In order to complete the study, the boat manufacturing
organisation, Williams Jet Tenders, has been selected. The head quarter of the venture is at
Vogue Business Park, UK. The products of the venture are mini jet, diesel jet, sport jet and
turbojet (williamsjettenders.com, 2017). The study will emphasise on the different types of
systems of accounting management and its application on the venture. As the authority of
venture tries to develop their accounting management system, the study will highlight on the
various kinds of planning tools for getting effective outcome. Accounting theory has been used
throughout the study for analysing the task in the appropriate way.
Figure 1: Logo of Williams Jet Tenders
(Source: williamsjettenders.com, 2017)
Task 1
LO1
P1 Description of accounting management and various types of system of
accounting with example
Explanation of accounting management
3

As per the viewpoint of Alawattage et al. (2017, p.70), accounting management system helps to
control the financial report of the enterprise in the lucrative way. However, management
accounting system tries to keep record about previous performance of organisation for
understanding their profit in the competitive market. The management of accounting assists the
authority of venture to take appropriate decision in proper time. In case of William Jet Tenders,
as it is a small-medium size organisation, they want to provide service by manufacturing boat all
over the country. In this case, they try to manage their accounting system for increasing budget
in the market.
Different types of accounting systems of management
In order to run the organisation, the authority needs to maintain different kinds of accounting
management systems, which are followed by-
Traditional accounting system
As mentioned by Bromwich and Scapens (2016, p.5), system of traditional accounting is a
method, which is used for predicting profit of the enterprises in the merchandise market. In time
of following traditional accounting system, the authority has focused on the procedure of cause
and effect for setting their budget in the appropriate way. In case of William Jet Tenders, as it is
a small venture, in time of expanding their business, the authority can focus on the above-
mentioned system for managing their accounting department in the effective way. It helps to
keep record about profit and expenses of entity.
Transfer pricing system
Transfer pricing incorporates that price of products is different for the companies of the country.
On the contrary, Chenhall and Moers (2015, p.10) stated that, if the subsidiary organisation sells
products to parent venture, the cost would be given by the parent venture. In this case, as
subsidiary venture transfers the goods to parent venture, it is called as transfer pricing system.
For example, in case of Williams Jet Tender, the authority needs to observe their sells for
keeping record appropriately. Transfer pricing system is used to control many ventures in a
company.
Throughput accounting
It is a simplified and principle based accounting system. According to Chiarini and Vagnoni
(2015, p.600), TA (throughput accounting) assists to provide important documents to the
managers of venture for helping them in time of taking crucial decision. In case of boat
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manufacturing venture, Williams Jet, the authority maintains the above-mentioned accounting
system for handling financial report of the enterprise.
Lean accounting system
Lean accounting system has focused on the management process, control and measurement of
performance of the employees in the venture. System of lean accounting helps to change the
management procedure for developing cost of the enterprise. In case of Williams Jet, they try to
maintain above-mentioned accounting system for increasing cost of the organisation.
The aforesaid management of accounting systems helps to run the venture in the appropriate
way. It helps to expand the business of small venture properly.
Figure 2: Different methods of accounting management system
(Source: learner)
P2 Different kinds of methods for managing accounting report
In order to manage the accounting report, different methods are used. The methods are followed
by-
Marginal costing
As commented by Chiwamit et al. (2014, p.150), marginal costing assists to increase and
decrease the cost of venture as per their production in the contemporary market. In time of
setting budget, the authority of venture needs to be aware of variable cost, stock, profitability and
their price rate. In case of William Jet, as they provide limited types of boats, marginal costing
helps them to introduce new types of boats in the venture. It increases profits of the organisation.
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Figure 3: Marginal costing system
(Source: Chiwamit et al. 2014, p.160)
Decision making
On the other hand, Christ (2014, p.380) contradicted that in order to manage the accounting
department of venture, the managers need to take proper decision. As per decision of managers,
the employees are able to work in the efficient way. Henceforth, if the managers are able to take
proper decision, they can earn profit in the enterprise. In case of Williams Jet, as it is small
venture, the authority tries to take proper decision for increasing their cost in the contemporary
market.
Financial planning
However, Christ and Burritt (2013, p.170) argued that, though the authority of venture needs to
follow decision making and marginal costing, they should draw their financial planning
appropriately. If the organisation are not able to plan related to their finance, they can earn profit.
Otherwise, it is observed that, the authority faces problem like exceeding budget in time of
setting budget. In case of Williams Jet, they have focused on their financial planning for
managing accounting department effectively.
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Figure 4: Different types of managing accounting report
(Source: learner)
M1
Accounting management system helps to run the venture in the effective way. As commented by
Cooper et al. (2017, p.90), if the organisations follow different system of accounting
management like lean accounting, transfer pricing and many others, it helps to manage the
accounting department of venture. For example, in case of William Jets, the organisation follows
transfer pricing system as they provide their goods to other ventures. Henceforth, benefit of using
transfer pricing system is that the accounting management department is able to control financial
sectors many ventures. It assists the venture to understand their position in the contemporary
market.
D1
As mentioned by Cullen et al. (2013, p.221), management accounting system helps to manage
the financial department of the venture. On the other hand, Fullerton et al. (2013, p.61) stated
that, management accounting report assists to get all kinds of information related to the financial
department of venture. In case of Williams Jet, they follow the above-mentioned accounting
system of keeping record. It helps them to understand their position in the market.
Task 2
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LO2
P3 Calculation of costs by using techniques
Profit calculation according to marginal cost
Details ($) ($)
Revenue of sales ( 500 * 35)
Less: Sales variable cost
- Opening inventory
- Production cost
( Direct Materials ) ( 600 * 6)
( Direct Labour ) ( 600 * 5)
(overhead variable production) ( 600 * 2 )
- Closing inventory (100 * 6)
Less: Costs of variable selling (500 * 1)
Contribution
Less: Cost of fixed administration
Less: Overhead fixed production
Less: Cost of selling
Net profit
-
3600
3000
1200
(600)
800
1800
400
17500
7200
500
9800
3000
6800
Profit calculation by taking help of absorption costing
Details ($) ($)
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Sales (500 * 35)
Less:
- Direct materials (600 * 6)
- Direct labour (600 * 5)
- Overhead variable production (500 * 2)
- Overhead fixed production
Goods cost which is available for sale
Less: Closing inventory {( 9400/600) *
100}
Gross profit
Less:
- Cost of fixed administration
- Overhead variable selling (500 * 1)
- Cost of selling
Profit
3600
3000
1000
1800
9400
(1567)
800
500
400
17500
7833
9667
1700
7967
M2 Different techniques of accounting management
Different types of techniques are used in time of preparing financial report in the effective way.
The techniques are followed by-
1. Absorption costing
2. Marginal costing
In the opinion of Christ and Burritt (2013, p.171), different techniques like marginal technique,
absorption technique are used in order to keep record, evaluate and analyse the financial
information in the lucrative way. For managing the internal procedure of the venture, the
organisations need to maintain the planning, decision making and many others. Different
techniques for managing the internal financial procedure of Williams Jet are followed by-
Budget and planning development
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Development of budget and planning assists to set the capital budget of the venture in the
appropriate way. The capital budget helps to provide the information about sale of venture, their
product quality and many others.
Decision-making
As mentioned by Dekker (2016, p.87), the decision of manager of venture depends on their
financial report. In case of Williams Jet, the authority tries to maintain their budget for bringing
effective outcome in the contemporary market.
Performance measurement
The actual result of operation assists to measure performance of employees in the appropriate
way. If the authority of Williams Jet is able to measure the performance of employees, they can
increase their production in the merchandise market.
D2 Reports of finance
Financial report of the venture assists to interpret the information related to business activities of
the enterprises. Business activity range incorporates the notion of planning, comparative
analysis, decision-making of previous records. As per the viewpoint of (2016, p.101), the
category of financial reports incorporates cash flow budget, budget report, costing budget and
many others. The above-mentioned reports are used in time of analysing the profit of venture.
After that, the final report is extracted and provided to the higher authority of venture. In case of
Williams Jet, the authority tries to focus on preparing the financial reports for increasing their
profit. The financial report has been prepared as per monthly, yearly and quarterly basis for
arranging data in the effective way. It has been showed that, financial report helps to compare
the data of previous years and present year.
Task 3
LO3
P4 Demerits and merits of various types of tools of planning
The organisations need to manage their planning tools in the proper way for getting effective
outcome. According to Hiebl (2014, p.233), in time of making plan for managing account of
venture, affinity diagram (KJ method), matrix diagram, interrelationship diagram (ID),
prioritisation matrix, PDPC (chart of process decision program) , tree diagram are considered as
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tools. The organisations try to use the tools for increasing profit in the contemporary market. The
tools for planning are followed by-
Tree diagram
In the opinion of Hall (2016, p.75), the authority of venture follows the techniques of preparing
tree diagram as they can get the details of their task. Tree diagram reflects the detailed
information about the job. In case of Williams Jet, as an officer of accounting management, the
authority can follow tree diagram tools in time of making their plan. It assists to provide specific
data to the higher authority of enterprise.
Figure 5: Tree diagram
(Source: Hall, 2016, p.71)
Advantages
Using tree diagram, the business organisations is able to see their expenditure of the specific
genre and is able to get clear information. If the officer of Williams Jet is able to follow tree
diagram, they can easily get the planning of previous years. Therefore, tree diagram provides
clear information to the authority of venture about their planning of different years.
Disadvantage
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As tree diagram is a manual process, it can be happened that, the employee is not able to prepare
the tree diagram properly. Henceforth, many a times, important factors related to finance have
been missed out. The organisations are not able to get appropriate information related to their
planning.
KJ method (Affinity diagram)
On the contrary, Fullerton et al. (2014, p.420) commented that, KJ method helps to gather huge
amount of data and sort it out according to the necessity of the venture. In time of planning, the
business organisations need to know the information related to their expenses and profit.
Henceforth, affinity matrix is prepared as per the working group of organisation. In case of
Williams Jet, accounting officer suggests that, they can use KJ method in time of planning their
motto is expand business all over the country.
Figure 6: Affinity diagram (KJ method)
(Source: Fullerton et al. 2014, p.422)
Advantages
KJ method helps to provide detail information about the every group of the venture. If the
organisation of Williams Jet follows the above-mentioned planning tool, they can get to know
about the expenditure and profit of every group. In order to control budget, it helps to identify
which group helps to earn huge profit. In time of setting budget, KJ method helps to bring
positive outcome.
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Disadvantages
As affinity diagram is considered as the brainstorming tool, it makes minor issue as a large
problem. In this case, the authority feels confused if they do any kind of mistakes in time of
planning. For example, in case of Williams Jet, it is common matter that, the employees are not
able to update their information properly. This kind of small mistake is shown as a large one. It
creates problems related to budget.
M3
As commented by Macinati and Anessi-Pessina (2014, p.101), different tools like prioritisation
matrix, tree diagram help to make the plan of the venture in the effective way. In case of
Williams Jet, as the authority tries to know all information of the venture, tree diagram is the
effective way. It provides proper source related to profit and expenditure of venture.
On the contrary, Quattrone (2016, p.120) stated that, affinity method assists to get all information
of the venture including the expenditure and profit of every group of organisation. It helps to
provide appropriate information in time of controlling the budget.
Task 4
LO4
P5 Comparison in different approaches of management accounting for
maintaining financial problems
As per the viewpoint of Tucker and Schaltegger (2016, p.380), the business ventures have
different kinds of problems like management, procedure and many others in time of preparing
their budget. In order to manage accounting, the business authorities follow different way like
tree diagram methods, prioritisation matrix, affinity diagram and many others. Many a times, it
has been noticed that, the employees of organisation are not able to update information in the
appropriate way. Therefore, in time of preparing budget, the authority faces problems in order to
set their cost. In this case, tree diagram is the effective approach for updating their information
perfectly. As tree diagrams helps to provide details about the strategy of venture, it helps to set
their short-term profit. As Williams Jet is a small venture, their aim is to increase their goods in
the venture. Henceforth, in time of introducing new kinds of boats in their venture, Williams Jet
has focused on their expenditure for bringing effective outcome.
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On the contrary, survey shows that, most of the organisations try to follow the governmental
policy and regulation in time of setting their budget. As per the Equality Act 2010, the authority
needs to provide equal attention on the opinion of employees. In case of Williams Jet, the
authority tries to maintain legislation appropriately for bringing effective outcome.
Solovida et al. (2017, p.598) stated that in order to determine the financial problems of the
venture, the authority can use benchmarking, KPI (key performance indicator) and many others.
The above-mentioned procedures assist to prepare the budget in the effective way. Being an
officer of management accounting of Williams Jet, it is necessary to go through the entire
transaction procedure of the venture for identifying the problems of the venture. If the gap has
been found, the authority will able to rectify it.
However, in the opinion of Suomala et al. (2014, p.305), the performance of employees helps to
earn profit in the contemporary market. Many a times, the employees are not able to provide
their best performance. In this case, it decreases the profit of venture. As a management
accounting officer, the authority needs to develop performance of employees for increasing
profit of Williams Jet. It is known to all that if the organisation is able to increase their profit,
they can bring improvement in time of setting budget.
M4
As mentioned by Van der Stede (2015, p.179), if the organisations are able to maintain
government legislation, they can avoid financial problems. However, in order to identify
problems, the authority can use the procedure of benchmarking, KPI and many others.
On the other hand, Tucker and Schaltegger (2016, p.389) stated that, employees face difficulties
related to the information in time of preparing budget. In order to solve the above-mentioned
problems, the authority can use tools like affinity diagram, prioritisation matrix and many others
in time of making their financial plan. Williams Jet uses above-mentioned tools and procedures
for bringing effective outcome.
D3
The planning tools like affinity diagram (KJ method), tree diagram, prioritisation matrix and
many others help to make the financial planning in the effective way. As Williams Jet is a small
organisation, they try to use the affinity diagram in time of making their financial plan.
Conclusion
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Henceforth, in order to conclude the study, it has been seen that proper managing system of
account helps to bring prosperity for the venture. In case of Williams Jet, the authority has tried
to follow the affinity diagram in order to maintain their financial planning. However, advantages
and disadvantages of using different tools like KJ method, tree diagram, and prioritisation matrix
have been discussed throughout the study. Different types of managing accounting systems like
lean accounting, transfer price, traditional accounting, throughput accounting have been
discussed in the lucrative way. Therefore, if the authority of business organisations is able to
manage their financial department effectively, they can earn positive outcome in the
contemporary merchandise market.
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