Management Accounting Report: Financial Impact of Electricity in SA

This report delves into the financial implications of fluctuating electricity prices and intermittent supply disruptions on small to medium-sized businesses in South Australia. It examines the symbiotic relationship between businesses and electricity, highlighting the critical impact of energy costs and supply reliability. The report explores the consequences of price fluctuations, including reduced service quality, customer dissatisfaction, and increased operating costs. It further investigates various management accounting tools and techniques, such as financial statement analysis, cost accounting information, and budgetary control, that businesses can utilize to assess and mitigate the financial impact of these challenges. The report also provides recommendations, including the adoption of solar energy and improved power infrastructure, to address the issues. Finally, the report emphasizes the importance of management accounting in understanding a company's financial capabilities and planning for future challenges.

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Effect of fluctuating electricity prices and intermittent interruptions to supply for small to
medium businesses......................................................................................................................3
2. Management accounting tools or techniques could these businesses use to determine the
financial impact of the current South Australian situation..........................................................4
Businesses use to determine the financial impact of the current South Australian situation with
the help of using these tool and techniques.................................................................................4
3. Recommendation.....................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Managements accounting is known as managerial accounting which provides the
information to the managers in their decision taking process (Bender and et.al., 2018). It require
accounting skills to manage the accounts and financial information. The present report studies
case scenario of north powers station in South Australia which experiences the series of power
interruption including state wide disruption. The report will discuss effects of fluctuating prices
and intermittent interruptions to supply for small business. Study on the tools and techniques
used in management accounting.
MAIN BODY
1. Effect of fluctuating electricity prices and intermittent interruptions to supply for small to
medium businesses
Their is symbiotic relationship between business and the electricity. Energies have an
important impact on the small scale business. The supply of electricity is the critical factor for
the small business (Dziawgo, 2018). When theirs is fluctuating electricity prices and intermittent
interruptions then the performance of the business results in the poor quality of supply of the
services by the small business and their inability to meets the growing demands of the customers
due to which the customers are not able to get satisfied by the product quality. Due to
inappropriate tariff charges which often results in the political interferences with the tariff
charges below the marginal cost (Sinobad, M.D., 2019). Due to poor governances or unstable
governments raises the issues for regional and ethnic conflicts. As a consumer of electricity it
creates the frustration for tariff charges and the small scale industry have less financial
flexibility. As in the fluctuation price the supplier of the electricity looks for earning of the extra
income.
The infrastructure of the small business affects the prices of the electricity as when the
business consumes more electricity the business energy prices will increases which requires to
increases the operating cost and the construction of the power station which causes to increases
the cost charges and electricity bills (Czytelnicy, 2018). Weather also affects the business
electricity prices when some times the power cuts are due to atmospheric condition which are
damaging the power lines and require to be repaired many times due to which the business of

small and medium scale industry gets affected and causes them to face the loss of the resources
like perishable goods, etc.
2. Management accounting tools or techniques could these businesses use to determine the
financial impact of the current South Australian situation.
The different tools and techniques of management accounting are financial accounting
information, cost account information, based on mathematics, future information, miscellaneous
tools and techniques of management accounting (Mason, 2019).
Financial accounting information: It includes the analysis of the financial statement with the
help of ratio analysis. The analysis can also be done through comparative statements, trends and
diagrams. Return on capital employed techniques can be used with the cash flow and fund flow
analysis.
Cost account information: the tool is used to find marginals costing, direct or incremental and
differential costing. Standard costing and cost variances can also be analysed.
Based on mathematics: operational research can be done with the linear programming
technique (Mite-Albán, 2018).
Future information: the budget can be set for the future, budgetary control tool, business
forecasting and evaluation of the project can be done.
Miscellaneous tools: it includes managerial reports , integrated auditing, financial planning,
management information system, etc.
Businesses use to determine the financial impact of the current South Australian situation with
the help of using these tool and techniques
Financial planning: It done by the small business to maximise the profit in the organisation.
The impact of financial planning on the business is that the tool enables to achieve the business
objective for small business (Zimmermann and et.al., 2018). The small business can plan their
finances according to theirs needs to meet the objective.
Financials statement analysis: with the helps of profit and loss account and balance sheet the
company is able to manage its debt and liabilities. Its impacts on financial statement is that
management is able to know its rate of growth with the help of comparative financial statements
(Moody and et.al., 2019).
Budgetary control: By using of the management accounting tool the managers can be able to
control budgets by understanding the future financial needs and control the financial

performances of the company. It impacts on the business by directing the business operations
towards the desired direction and achieve the objective of the company. Budgets can be kept for
the losses due to fluctuation in price of electricity(Sedevich-Fons, 2018).
3. Recommendation
The south Australian can generates the electricity with the help of using solar energy for
the generation of the electricity as it is most conventional sources of the energy . Theirs is no
charge for electricity supply only the installation charges required to be paid. South Australia can
install different power station so that they does not affect whole south Australia for electricity
disruption. Managements accounting tool are very use full for the company to know its financials
capabilities in the market. Budgets control toll helps the small business to manage their
financials needs and deal with the fluctuation in the prices of electricity.
CONCLUSION
From the above report it can be concluded that managements account helps to know the
financial capabilities of the company. The tools of management accounting help to assess future
planning to meet the objective of the company. Power cuts and fluctuation in the prices ODF
electricity causes huge loss to the small business. To overcome these situation the small business
can manages the budgets and control it to deals with the price fluctuation situation.

REFERENCES
Books and Journal
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Dziawgo, T., 2018. WEALTH MANAGMENT MARKET IN CHINA OPPORTUNITIES AND
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Czytelnicy, S.A., 2018. Od Zespołu Redakcyjnego.
Mason, D., 2019. Exam Prep for: GEN COMBO LL FOUNDATIONS OF FINANCIAL
MANAGMENT; CONNECT ACCESS CARD. Rico Publications.
Mite-Albán, M.T., 2018. Management accounting strategies applied to smes literary review.
Revista Lasallista de Investigación. 15(2). pp.256-270.
Moody, J.A., and et.al., 2019. Fertility managment in testicular cancer: the need to establish a
standardized and evidence‐based patient‐centric pathway. BJU international. 123(1).
pp.160-172.
Sedevich-Fons, L., 2018. Linking strategic management accounting and quality management
systems. Business Process Management Journal. 24(6). pp.1302-1320.
Sinobad, M.D., 2019. Primjena kreativnog računovodstva u području priznavanja prihoda
(Doctoral dissertation, University of Zagreb. Faculty of Economics and Business.
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Zimmermann, H.W.A., and et.al., 2018, March. Accounting for incremental crop management
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online
Management Accounting. 2019. [online]. Available through<https://accountlearning.com/tools-
and-techniques-of-management-accounting/>.