Cost Accounting Report: Balanced Scorecard Framework for Business

This report focuses on the application of the balanced scorecard within the context of cost accounting. It begins by defining the balanced scorecard as a management system designed to translate organizational strategic goals into measurable objectives, with a particular emphasis on aligning financial accounting metrics with overall strategic objectives. The report explores the four key perspectives of the balanced scorecard: learning and growth, internal business processes, customer perspective, and financial perspective. It details how each perspective contributes to a holistic view of the organization's health, emphasizing the importance of employee training and knowledge sharing (learning and growth), efficient internal processes, customer satisfaction, and ultimately, financial performance. The report also discusses the interdependencies between these perspectives, highlighting how improvements in one area can positively impact others, leading to enhanced overall business performance. The conclusion emphasizes the balance between leading and lagging indicators, representing the drivers and outcomes essential for company success, as per the balanced scorecard framework.

Cost Accounting 1
Cost Accounting
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Cost accounting
Introduction
The balanced scorecard can be defined as a management system that strives for the
translation of the strategic goals of the organization into a well-defined set of objectives of
performance that are ascertained, evaluated and altered if essential to ensure that the
organizational goals are met. A major highlight of the balanced scorecard approach is that the
metrics that deal with the financial accounting perspective must be in tune with the strategic
goals so that the companies are in momentum (Horngren et. al, 2014). In short, the balanced
scorecard is a system based on the management and is a way of peering at the organization that
stress on the goals of the organization. It is of paramount importance as it helps in selecting the
correct things to ascertain that enables to reach the goals.
Perspectives
A balanced scorecard looks at the organization through four various perspectives so that
the health of the organization can be measured. Every perspective stresses on a different aspect
of the company that leads to a creation of the balanced view of the company.
 Different perspectives
Firstly, the perspective of learning and growth tames the total corporate culture. Technology
plays a major role in learning, as well as growth. People from the organization must be aware of
the latest trends and employees must collaborate and share knowledge. The organization should
plan in a manner that provides a boost in the competitive arena (Horngren et. al, 2014).
Secondly, the perspective of internal business processes needs to be dealt with. This projects how
efficiently the business is progressing. Efficiency is an important consideration as it helps in
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reduction of waste, fastening the things, etc. Thirdly, the customer perspective stresses on the
people who purchase the products, as well as services. This determines whether a new business
is won and how the existing customers are retained in a happy manner. This is due to the fact that
the customer satisfaction is the soul of the business (Parrino et. al, 2012). Lastly, the financial
perspective comes to the forefront. An important consideration is that whether money is being
made, are the shareholders making money, the financial soundness of the organization, etc.
 Stacking the perspectives
When it comes to the concept of the balanced scorecard, the four various perspectives are shown
in an independent fashion. However, the impact of the balanced scorecard happens and often
relate to each other. In short, they behave in the manner we match them (Philips, 2005). Going
by the modern concept, it can be seen how every perspective is related to the previous one. If the
employees are trained and influence to establish a culture of sharing of information that projects
towards the internal business processes then the company will run in a smooth manner (internal
business process). Moreover, a company that runs smoothly takes care of the customers and
happy customer’s leads to selling that are financial (Wagenhofer, 2014).
Conclusion
The balance scorecard framework dwells on the balance that exists between the indicators that
are leading and lagging and can be easily commented as the drivers and outcomes needed by the
company.
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References
Horngren, C. T, Datar, S. M, Rajan, M. V, Wynder, M. B, Maguire, W. A. A, Tan, R. C. W.
(2014). Cost Accounting: A Managerial Emphasis. New South Wales: Pearson Australia
NJ: Wiley.
Parrino, R, Kidwell, D & Bates, T. (2012). Fundamentals of corporate finance. Hoboken,
Phillips, R.L. (2005). Pricing and Revenue Optimization. Stanford Business Books.
Wagenhofer, A. (2014). The role of revenue recognition in performance reporting.
OxfordUniversity Press
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