Advanced Management Accounting Report: Balanced Scorecard & Tech

This report delves into the realm of advanced management accounting, exploring the transformative effects of internet and information technologies on organizations, with a specific focus on Farmfoods Limited. Part A critically analyzes how innovations such as cloud services, artificial intelligence, and blockchain are reshaping industries and the digital economy, impacting management accounting practices. It assesses the opportunities, challenges, and limitations associated with these technologies. Part B focuses on designing and outlining a Balanced Scorecard for Farmfoods Limited, providing a framework for performance measurement and strategic alignment. The report examines Farmfoods' current situation, including its market position, financial performance, and competitive landscape, to inform the development of the Balanced Scorecard. The Balanced Scorecard is a strategic performance management tool used to improve performance in an organization. The report considers four perspectives; financial, customer, internal processes, and learning and growth.

Advanced Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
Critical analysis of how innovations in internet as well as related information technologies are
transforming organisations together with how they affecting work of management accountants
......................................................................................................................................................1
PART B............................................................................................................................................5
Choosing ant company and analysing its current situations in order to design, develop and
outline a Balanced Scorecard for the business.............................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Advanced management accounting could be defined as a concept that is organised nearby
to emphasis on tactics which enables organisational managers to contribute in successful
navigation of attainment of mid to long term objectives. It was developed for the purpose of
providing information that is appropriate to make decisions within dynamic environments (Wu
and Wang, 2020). It includes techniques that are multidimensional composite of planning
addition to controlling subsystems which provides information for decision making as well as
improving performance of the venture. For understanding about advanced management
accounting, selected company is Farmfoods Limited which carry out its operations in retail
industry. It is frozen food supermarket chain whose headquarters are established at Scotland, UK
since 1955.
The project file is prepared in two parts wherein Part 1 includes analysis of technologies
and the ways they have transformed digital economy, ways in which digital technologies effects
accounting and assess opportunities, limitations concerned with digital technologies. On other
hand, Part 2 highlights development along with outline of Balanced Scorecard for the entity.
PART A
Critical analysis of how innovations in internet as well as related information technologies are
transforming organisations together with how they affecting work of management
accountants
Internet could be said to global system of interconnected computer networks which
makes usage of Internet protocol suite with the hope of communication among networks and
devices. Similarly, information technology is termed to study, design, development, execution
and management of information system that are based on computer to work well for humans
(Cleary, 2015).
In an organisation, information technologies plays plays crucial role in facilitating storing
together with regaining wider information in quick time through hardware and software
workstations in comparatively lesser costs. With passage to time, huge number of innovations
are analysed in internet as well as information technologies that acts as successful factor in
transforming businesses (Soderstrom, Soderstrom and Stewart, 2017). Some of technologies and
the ways they are transforming industry along with digital economy are as follows:
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Cloud Services: It is a technology that is delivered on demand to businesses as well as
customers over internet. Major objective to design the internet technology is to provide
affordable and easy access to resources to entities without requirement of internal infrastructure.
For an organisation, cloud based infrastructure is essential for delivering flexible and on demand
access that underpins new digital offerings of entity (Pelz, 2019). In context to an organisation
for example, FarmFoods Limited, cloud service have transformed the practices as it permits
workforce in scaling infrastructure on the basis of requirement of support changing priorities by
making reductions in risks concerned with wasted IT resources with the help of which past
investments are inhibited in advanced digital services. Likewise, through cloud services, political
parties are able to dedicate more resources related to information technology fro creating as well
as continual development of systems that engages, insights together with action for improving
economic conditions. Information technology such as cloud service ensures that available
application and new digital services are managed consistently for security, scalability addition to
relatability that improves connectivity and radical changes in all aspects of the retail industry.
Artificial Intelligence: It refers to simulation of an individual intelligence within
machines which are programmed for the purpose of thinking similar to humans along with mimic
their actions. Most of modern entities have access of large volume of online data. In association
to an industry, artificial intelligence help in uncovering data insights which permits top players to
manage their resources so to serve better customers. The information technology is transforming
retail industry by increasing efficiency, accuracy along with speed across all branches of the
industry. For example, implementation of artificial intelligence in Farmfoods Limited have
played role on reshaping entire retail industry as it builds interactive chat programs for
improving customer engagement, algorithms engines translation allows in visual curation and
advanced CRM helps in dynamic outreach (Marotta, 2020). It have also empowered retailers
with high level of data which improves overall retail operations and provide new opportunities of
growth. Similarly, artificial intelligence is seen as backbone of upcoming digital economy. It
transforms digital economy through driving wider choices of commodities addition to services,
improving productivity of establishment by automating labour intensive roles and offering high
personalisation levels.
Blockchain: Blockchain technology is that one of effective information technologies
which stores transactional records associated to public in multiple kinds of database in network
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connected via peer to peer nodes. In simple words, blockchain technology is termed as digital
record of transactions. In retail sector, huge transformations are possible with the technology as it
accords more transparency together with automates diverse processes that reduces operational
costs (Carlsson-Wall, Kraus and Lind, 2015). It have minimised counterfeit circulation of retail
products, creates stiff competition among retailers, assist in tracking inventories and reduces
overheads which transforms the industry to great level. Furthermore, blockchain technology may
sound complicated, it is actively incorporated in diverse uses particularly to build, transform and
support digital economy. It plays great role in transforming digital economy as it reduces
verification together with networking costs, creates architectural changes, automate practices and
so on.
In accounting, digital technologies plays critical role as it have brought accounting
professionals along with customers closer. There are certain dedicated platforms that are
established by digital technologies that make communication easier and instant which permits
accountant to translate financial information in the manner that saves time and enhances
efficiency. In context to general accounting, financial analysts of Farmfoods Limited have
analysed that digital technologies permits automation of accounting with the help of transferring
information into multiple systems together with reports. As automation saves time and resources,
it creates huge problems when data is entered incorrectly. Within general accounting, automatic
transfer of numbers have chances of errors down lines within reports (Wahyuni and Triatmanto,
2020). Moreover, bugs in technology causes incorrect calculations that results in negative effects
on accounting. Moreover, digital technology changes rapidly when computerised accounting
systems become outdated with time. Functionality of older system is restricted against updated
software. With this, it is seen that either operating on system with less functions or making
investment for upgrading to different version of the system. For example, when accountants of
Farmfoods Limited switch completely to different management accounting systems or software
then it effects on practices as it makes transferring of old information from past systems more
complicated. Moreover, it is also analysed that security of accounting systems within
computerised programs are restricted or limited to quality of the program and organisational
security system. In case, poorly protected database leaves open doors for hackers as well as
unauthorised personal to access all types of general addition to management accounting related
information. Later, the information have chances to be utilised for malicious purposes which
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negatively effect business and its workforce when their personal information are accessed by
others.
Digital technologies have advanced tremendously that presents huge opportunities for
management accounting practices as well as management accountants. Advancement in digital
technologies have wider probability to impact on balances of roles of accountants and offers
insights to balance responsibilities across different practices by potentially shifting towards
strong emphasis in specific area. One of opportunity which digital technologies present to
management accountant of an enterprise is streamlining processes. With this, management
accountants are able to understand significance of implementation of advanced digital
technologies at an intimate level (Novas, Alves and Sousa, 2015). This streamlines all their
processes that are essential in preparing reconciliations as well as adopting auto certification with
the hope of reducing volume. For instance, accountants of Farmfoods Limited are able to watch
beyond management accounting practices are carried out and fosters working to improvise
existing processes which work with tech stack of venture. The other opportunity that is presented
by digital technologies to management accountant together with management accounting
practices is to improve understanding of technology and software. For example, management
accountant of Farmfoods Limited improves their focus on real time, driving balanced workloads
and preventive controls through using digital techniques while performing accounting practices.
This provides them greater opportunity to understand about technology available in the market
which helps business in becoming more effective in close practices.
There are certain number of problems, challenges and limitations that are presented by
digital technologies to organisational management accounting practices addition to management
accountant. In case with Farmfoods Limited, one of limitation is that it causes complexity as
adoption of digital technology at each wave is like becoming tech savvy. Each management
accounting or for each management accounting practice, certain types or system related to
management, analytics or any other accounting tools are taken into consideration. This causes
complexity among management accountant as wider systems are layered to perform roles and
responsibilities that results in decreasing productivity together with creates difficulty in keeping
track of all systems. Another problem that digital technologies creates on management
accounting practices along with management accountant is work overload (Murthy and Rooney,
2018). In relevance to management accountants of the business, digital technologies increases
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burden of work as the accountants have to spend their days in keeping up with storing, managing
and other practices of management accounting digitally. At same time, it is determined that
organising vast level of digital data by management accountants results in huge headache.
PART B
Choosing ant company and analysing its current situations in order to design, develop and
outline a Balanced Scorecard for the business
About the company
FarmFoods Limited is a retail organisation that is specialised in selling groceries along
with frozen commodities. It operates throughout UK and have nearby three hundred outlets. It is
a Scottish family business that is serving since 1955. It work hard for bringing best values on
food that is enjoyed by family and also provides household essentials according to needs of
family. Along with frozen food, the company also sells fresh fruits and vegetables, chilled foods,
milk and hence forth. It is a team of approximate 4000 people that share passion to get working
done greatly. At present, employees of Farmfoods Limited are trusted for carrying out allotted
practices and have control to deliver simple, friendly addition to friendly operations.
Entire business addition to culture of Farmfoods Limited emphasis towards bringing best
values for customers on their shopping. It work hard in order to keep things simple addition to
eliminate wasted cost at the time they find it. Furthermore, stores of the entity are designed and
built for being efficient and comfortable for target audience so that they shop in hassle free
environment. In the year 2020, total assets of the entity includes £212 million, working capital of
£ 6 million, gross profit of £ 18 million, turnover of £ 662 million and cash of £ 11 million
(Farmfoods Limited, 2021). The organisation have full along with part time positions that are
available for suiting present commitment together with life. Currently, Farmfoods Limited is at
eleventh position in retail sector that is mostly used for groceries with the country.
Last proportion of customers of Farmfoods Limited are less likely to reside in rural
community than average customers of UK. Around 36% of customers of the venture follow rules
of nutrition. Key competitors of the retailer includes Balducci, Rollin' Oats, PARKnSHOP
Limited, Planet Organic Limited, Bruno's, M&M Meat Shop and many more.
Designing, development and outline of Balance scorecard for the entity
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Balance Scorecard is delineated to a metric that business managers uses for determining,
improving as well as controlling various functions addition to resulting outcomes (Banabakova
and Georgiev, 2018). Key emphasis of balance scorecard is towards high level strategy as well as
low level measures. It involves four perspectives that are financial, internal business process,
customer and learning along with growth. In context to financial perspectives, major emphasis is
towards identifying few relevant financial measures. With this, managers choose measure which
assist them to look towards operating income, cash flows, etc. Another perspective is customer
that looks to identify measures for analysing the things that are important for customers and
stakeholders. Other perspective is learning and growth that stimulates identification of measures
so to look towards the ways for continuing improvements, generating values as well as
innovation. Internal business process perspective influences recognition of measures that helps
organisation to excel in unit cost, product introductions, cycle times and so on.
In Farmfoods Limited, use of Balance Scorecard helps in measuring and providing
suitable feedback to the venture. With this, administrators are able to draft organisational
strategy through elaborating what is significant to the enterprise (Rezende, 2017). It maintains
critical emphasis on organisational top priorities. It aids in linkage of all decisions together with
tasks to grander that are inspiring goals which are supported by professionals. Likewise, it assist
in better decipher about the things on which time and resources are not dedicated properly.
Balance Scorecard for Farmdfoods Limited is drafted below:
Basis Objectives Goals Indicators Initiatives
Financial
perspective
Enhancement
of product sales
as well as
reduction in
diverse costs
To increase
20% in net
sales along
with
decreasing
18% of
operating
costs.
Indicators for
financial
perspective includes
financial statements
that are income
statement, balance
sheet, statement of
shareholders equity
and statement of
cash flow.
Initiative that
managers of
Farmfoods Limited
undertakes is
negotiation with
suppliers.
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Customer
perspective
Having wider
number of
attractive
outlets for
diverse
customers.
To enhance
average
number of
day to day
visits in
stores of
customers by
30%.
Indicator of
customer
perspective in
achievement of
objective is count of
customers.
Key initiative that
marketing department
of the retailer have
chance to use is
improving display of
products along with
investing towards
social media.
Internal process
perspective
For being
potential for
developing new
commodities in
constant
manner.
To initiate
with around
three new
product
development
projects each
month.
Devising and
analysing project
innovation reports is
indicator for the
establishment
(Embree, Swenty
and Schaar, 2015).
Initiative that could
be undertaken to meet
internal process
perspective is to
acquire and set
particular software or
digital technology to
manage development
of product.
Learning along
with growth
perspective
Having sales
force that have
experience and
knowledge
about the
profession.
To replace
around 15%
of employees
in sales and
marketing
department.
Indicators includes
number of
termination of staff
versus new
contracts.
Initiating with
process along with
approach of
recruitment and
selection.
CONCLUSION
From the mentioned information, it is concluded that advanced management accounting
comprises of certain techniques addition to concepts which are organised in context to business
strategy for achieving success. It provides insights relevant with planning, devising decisions,
evaluating performance and controlling. Three technologies that are transforming industry as
well as digital economy includes cloud service, artificial intelligence and cloud service. Internet
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as well as concerned information technologies are rapidly raising concerns relevant with
accounting profession. Balance Scorecard is a management system that is used for aligning daily
practices with effective strategy. It needs particular measures about learning and growth,
financial outlook, internal process and customer.
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REFERENCES
Books and Journals:
Banabakova, V. and Georgiev, M., 2018. The role of the Balanced Scorecard as a tool of
strategic management and control. International E-Journal of Advances in Social
Sciences. 4(10). pp.84-99.
Carlsson-Wall, M., Kraus, K. and Lind, J., 2015. Strategic management accounting in close
inter-organisational relationships. Accounting and Business Research. 45(1). pp.27-54.
Cleary, P., 2015. An empirical investigation of the impact of management accounting on
structural capital and business performance. Journal of Intellectual Capital.
Embree, J. L., Swenty, C. F. and Schaar, G., 2015. A Balanced Scorecard With Strategy
Map. Journal of nursing care quality. 30(4). pp.352-358.
Murthy, V. and Rooney, J., 2018. The Role of management accounting in Ancient India:
evidence from the Arthasastra. Journal of Business Ethics. 152(2). pp.323-341.
Novas, J., Alves, M. D. C. and Sousa, A., 2015. Management accounting systems, intellectual
capital and performance: an integrated approach.
Pelz, M., 2019. Can management accounting Be helpful for young and small companies?
Systematic review of a paradox. International Journal of Management Reviews. 21(2).
pp.256-274.
Rezende, J., 2017. Balanced Scorecard e a gestão do capital intelectual. Elsevier Brasil.
Soderstrom, K. M., Soderstrom, N. S. and Stewart, C. R., 2017. Sustainability/CSR research in
management accounting: A review of the literature. Advances in management
accounting.
Wahyuni, N. and Triatmanto, B., 2020. The effect of the organizational change on company
performance mediated by changes in management accounting practices. Accounting.
6(4). pp.581-588.
Wu, Y. and Wang, X., 2020, February. Application of blockchain technology in the integration
of management accounting and financial accounting. In The International Conference
on Cyber Security Intelligence and Analytics (pp. 26-34). Springer, Cham.
Online:
Farmfoods Limited. 2021. [Online]. Available through: <https://www.farmfoods.co.uk/>
Marotta. D., 2020. Artificial Intelligence: How AI Is Changing Retail. [Online]. Available
through: <https://global.hitachi-solutions.com/blog/ai-in-retail>
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