Management Accounting Systems: Benefits, Application & Integration

This essay explains management accounting, highlighting its specific information delivery, adherence to double-entry bookkeeping, and focus on business opportunities. It details the scope of management accounting, including financial accounting, costing, inventory management, statistical methods, and interim reporting, emphasizing the importance of different accounting systems. The effective allocation of resources, improved departmental performance, and communication of metrics are underscored. The essay also evaluates the benefits of management accounting systems, such as expense reduction, informed decision-making, improved cash flow, and higher rates of return, illustrating their application across various business departments like marketing, production, and finance. Finally, it discusses the integration of management accounting within organizational processes for cost control and increased return on investment, using UCK furniture as an example of a business that applies management accounting principles.

Assignment 1
TASK 1

Explaining the management accounting
Management accounting offer specific
information to people
Follow the specific principles related to double
entry system of book keeping
Focuses on specific opportunities available to
business
The scope of management accounting can be
considered in term of financial accounting,
costing and inventory, statistical methods as well
as interim reporting.

Requirement of different types of
accounting systems
 The use of management accounting procedure proves to be
effective to allocate the resources effectively
 Ensure higher performance of different departments such
as production, finance, marketing
 The different accounting system are helpful for the sake of
identification, analysis and communication metric in the
accounting system

Cont...
 Use of management accounting system helps to
communicate the information in all respective department
 Offers a standard framework to identify the economic and
financial factors
 Determine the financial health as well as taxation of the
business as well as economies.

Different methods used for management
accounting reporting
 Account receivable aging
 Job cost reports

Cont...
 Inventory and manufacturing
 Budget report

Evaluating the benefits of management accounting
systems and their application within organizational
context
 Reducing the expenses
 Appropriate business decision

Cont...
 Improving the cash flow
 Higher rate of return

Application
 The management accounting system is applied in each
department of the business such as marketing, production
and finance etc.
 The cost structure is prepared in accordance with different
techniques of management accounting.
 Marginal, job and process or batch costing might be applied
in the department of production for effective recording
keeping of cost.
 The analysis of the business activities is done in accordance
with management accounting report or application of
appropriate tool.

Evaluating integration of management
accounting system and management
accounting within the organizational
process Management accounting is the core concept applied by
business for controlling the cost and increasing the rate
of return
 Appropriate system is selected by the business in order
to keep record related cost
 Effective allocation of cost for particular job
 Management accounting report is prepared on the
basis of selected system

Cont...
Evaluation of the collected information is done in accordance
with applied procedure of management accounting system
UCK applies the management accounting system as per the
business objectives
All departments or branches of UCK furniture follow the
appropriate standard for completion of business related
activities

References
Pandikumar, M. P., 2007. Management Accounting theory and
practice. Excel Books India.
Macintosh, N. B., and Quattrone, P., 2010. Management
Accounting and Control Systems: An Organizational and
Sociological Approach. John Wiley & Sons
Brent, J. R., 2007. Applied Cost-benefit Analysis. Edward Elgar
Publishing.
Cost - Methods, Techniques of Cost Accounting and Classification
of Cost. 2017. [pdf]. Available through:
<http://dosen.narotama.ac.id/wp-content/uploads/2013/02/Chap
ter-11-Cost-Methods-Techniques-of-Cost-Accounting-and-
Classification-of-Cost1.pdf>. [Accessed on 18th March 2017].