HNBS 305: Management Accounting Systems and Reporting Analysis

This report delves into the core concepts of management accounting, emphasizing its significance for effective business operations and decision-making. It explores various management accounting systems, including cost accounting, inventory management, job costing, and price optimization, detailing their functions and advantages. The report examines different types of reporting systems, such as performance reports, inventory management reports, account receivable reports, and job costing reports, highlighting their roles in controlling and managing business transactions. Furthermore, it provides a critical evaluation of these systems, analyzing their impact on organizational performance and profitability, with specific reference to UCK Furniture. The conclusion underscores the importance of management accounting in achieving organizational goals and objectives, advocating for the adoption of various accounting systems to facilitate informed decision-making and sustainable growth.

Management Accounting
PART 1

Covered content
• Introduction
• Various types of Management accounting system
• Different types of accounting reporting
• Benefits of using MA system
• Critical evaluation of reporting
• Conclusion
• References

Introduction
Management accounting is an essential aspect for every
business enterprise. This will assist managers to manage and
control their daily operations in more effective manner. This
project provides crucial information about various
management accounting systems and their valuable
requirements in future decision making.

Management accounting systems and their
essential requirements
Every organization in a manufacturing business lot of issues
takes place with regards to accounting and finances. For a Raw
material to become a finished goods, it has to go from various
processes and at every process accounting of all the transactions
is necessary to have the knowledge whether it is profitable or not
for a company to operate those processes. Accounts are usually
prepared as per the guidelines and standards set by the
accounting boards of concerned country.

Types of MA system
Some of the accounting systems are described as below :
Cost accounting System : A proper Cost accounting system
helps in estimation of total cost of various products to be
produced. Some other functions of cost accounting system
includes management and control of cost, valuation of
inventory and evaluation of profits.

Inventory Management
It is a system of controlling cost of inventory and overall
management of quality and quantity of inventory. Inventory
usually includes Raw material, Work in progress and
Finished Goods. This accounting system also take care of
analysing various inventory levels which includes
minimum, maximum and normal inventory level.

Job costing system
Under this type of costing, The overall cost of Production is
allocated to an individual products or a batch. These types
of costing is applied where the goods produced are not
identical to each other and therefore cost can be allocated to
them separately. It comprise of all routine with regards to
gathering data on the costs related to a particular
administrations or assembling work exercises.

Price Optimisation system
It is a system of numerical evaluation, it is used by
organizations to estimate the perception of customers about
a particular product of company and what is the price which
is expected by them. 'UCK Furniture' uses this system to
analyse consumer behaviour and demand pattern for their
furniture products.

Different types of reporting systems used in an
organisation
In every manufacturing sector, it has been seen that they
are not able to make record of their financial transaction in
proper manner. In order to control and manage their daily
business transaction a well effective reporting systems
should be use by the account managers to control any losses.

Types of reporting system
Some of them are discuss underneath:
• Performance report: It is basically done by the
company to make use of past data in order to analyse
current year performance. This is most done to
determine whether are performing well in order to
generate better outcomes during the year.

Inventory management report
This report is mostly done to manage and control their stock
position that are incurred during the time. These can be done
by recording opening and closing inventory that are being
occur at that period of time. Some effective tools are ABC
costing, Inventory turnover as well as EOQ.

Account receivable report
Such kind of reports are prepared by the mangers in order to
determine total lists of unpaid customers and credit amounts
those are still outstanding. It is a legal enforceable claims for
making payment those are held by a business for products
supplied to the customers.

Job costing report
According to this particular reports, few vital information
regarding the present status of a job and easily be determine
and total time they are needed to completed an individual
task. It would assist in order to reveal the accurate costs and
incomes for an individual job.

Operational budget report
It refers as the combination of well known expenditure and
expected future costs over the course of an accounting year. They
are prepared in advance of financial period so that early
estimations can be done. It includes forecast of total value of
resources which is needed for the performance of operation
belong to reimbursable work for others.

Benefits of using management
accounting system
Management accounting provides various advantages to
company. UCK furniture uses management accounting to
enhance its operations and overall profitability. It gives
company a competitive edge over the others and therefore it
helps in ascertaining total cost of company.

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Accounting Systems Advantages
Inventory Management System  It improves accuracy of stock valuation as well as stock orders.
 By application of proper inventory management system it can raise overall productivity
of the company and it also saves crucial time for the company which can be used by
company in focusing on its core operations.
Job Costing System  By using this costing system UCK furniture would be able to assist cost of its
production and would be able to allocate it to various jobs and products in an efficient
manner.
 It also keeps a check on the quality of work done. It is concerned with a particular job.

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Price Optimisation System  UCK Furniture will be able to assess consumer behaviour through this system and it
will help it in deciding about the price of its furnitures and various other products
that it offers.
 Through this the company can achieve gains in operations and a best possible
pricing is decided for products of company.
 Segmentation of various customers can be easily done with the help of this
accounting system.
Cost accounting System  This Costing system helps in determining cost of operations and of particular
products as well. Through this a company can bring efficiency in its workings by
managing its cost well and this will reflect in pricing of company and overall
profitability. The company uses cost accounting for the purpose of making sound
financial decisions which will help it to enhance its business operations even well.
 Cost accounting also helps management in deciding whether to make a product or
not, a management will only produce a product if its costing is less then its pricing.

Critical evaluation of accounting system
incorporate within the organisation
According to above mentioned reports every possible
outcomes can easily be manage and control their every
business transactions. The primary aims of managers is to
make proper analyse regarding their overall valuation
regarding their inventories as well as other aspects those are
mostly impact ratio of UCK furnitures.

Accounting reporting analysis:
• Budget reporting is a well organise combination of various
organisational procedures which is associated to UCK Ltd.
They need to make early estimation of total costs and
expenses those are going to be done in an accounting year.
• Account receivable aging reports are one of the vital
record which is used in management accounting systems to
determine total recovery time and lists of customers. This
will deliver timely payment of outstanding amounts.

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• Performance report: These are mostly useful in formulating a
well organise plan for the betterment of UCK business
organisation. The managers uses these reports to make valuable
plan for the increase goodwill in the market.
• Job cost report: Few activities of UCK furniture will be guided
towards total costs control measure out of which they are set
well appropriate pricing plan. By the help of this, company can
easily control their costs of individual products and services.

Conclusion
From the above project reports, it has been concluded that
management accounting is an essential aspects for the managers
to make recording of their daily business transactions. This
would assists in attainment of organization aims and objectives.
For this purpose, various accounting systems would help in
reaching to the set destination. The overall project reporting is
delivering maximum focus on generating better outcomes in
order to maintain effective growth and sustainability in coming
time.

References
Willcocks, L., 2013. Information management: the evaluation of
information systems investments. Springer.
Brigham, E. F. and Ehrhardt, M. C., 2013. Financial
management: Theory & practice. Cengage Learning.
Wrisberg, N and et. al., 2012. Analytical tools for environmental
design and management in a systems perspective: the
combined use of analytical tools (Vol. 10). Springer Science
& Business Media.

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