Management Accounting: System Analysis and Financial Reporting

This report provides a comprehensive analysis of management accounting, focusing on its application within the context of Connect Catering Services. It begins by defining management accounting and exploring various systems like inventory management, price optimization, and cost accounting, along with different reporting methods such as performance and budget reports. The report then delves into cost analysis, comparing marginal and absorption costing methods, and demonstrates their application in preparing income statements. Furthermore, it examines the advantages and disadvantages of planning tools, emphasizing their role in addressing financial problems. The report concludes by highlighting how management accounting systems provide solutions to financial issues, ultimately contributing to sustainable success. The content includes detailed explanations, calculations, and practical examples to illustrate the concepts discussed.

Management
Accounting
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1. Define management accounting as well as various kinds of management accounting
systems.........................................................................................................................................4
P2. Different ways adopted for administration accounting reporting..........................................6
M1. Benefits of management accounting systems......................................................................7
D1. Assessment of accounting systems as well as management accounting reporting...............8
TASK 2............................................................................................................................................8
P3. Calculate costs by adopting proper tools of cost analysis.....................................................8
M2. Application of different management accounting techniques & manufacturing effective
financial reporting documents...................................................................................................10
D2. Financial reports helps in understanding operational activities..........................................10
TASK 3..........................................................................................................................................11
P4. Explain advantages as well as disadvantages of various kinds of planning tools...............11
M3. Use of planning tools.........................................................................................................12
TASK 4..........................................................................................................................................13
P5.Compare how company are using management accounting systems to provide response to
financial problems.....................................................................................................................13
M4. Management accounting solve financial issues that can results in sustainable success.....14
D3. Planning tools to solve financial problems.........................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Management accounting is process related to financial data and information that
determine various processes related to research and administration of financial information in
such a way that assists company to make plan for upcoming period of time &maintain policy as
well as possess appropriate control over whole activity of company. In addition to this, the utility
related to accounting assists management for improvement of company during particular phase
of time period. It is not important for organisation to accept any kind of accounting related to
organisation as it requirements are depend upon objective of organisation. To maintain
management accounting, the chosen organisation is named as Connect Catering Services. It is
family-owned catering business located in Oxfordshire and their focus is on approaching
accountancy firms to provide advice on introduction of administration accounting system. This
report provides discussion regarding management related to system along with significance,
requirement related to reporting procedure used for appropriate method of cost analysis that help
in preparing income statement by using amalgamation cost & subsidiary cost. In addition to this,
it also increases involvement of planning tool along with advantages and its limitation in
adoption of management accounting system that help in providing solutions to all financial
problem that assists in offering direction for sustainable achievement(Hariyati, Tjahjadi and
Soewarno, 2019).
TASK 1
P1. Define management accounting as well as various kinds of management accounting systems
Management accounting
It is determined as a technical action that signifies accepting, assessing, recording financial
as well non financial information that help in taking appropriate decisions in respect of aim of
organisation. Therefore, there are different kinds of factor that assists in designing and also their
focus is on presenting proper financial statement. In addition to this, it is adopted by
management team of chosen organisation while improving short as well as long time
determination to conduct familiar procedure of organisation without any kind of issues.
Management accounting system
The concept related to management accounting is determined as a future oriented that
involves various activities and possess larger scope that help in reaching in respect of various
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division of organisation. The description related to different kind of accounting system in
reference of chosen organisation is going to be mentioned below:
Inventory administration system signifies gathering of products which is used at various
places to manufacture unique goods for purpose of selling. The company connected to
management of inventory during particular phase of time period. A proper record is managed by
using this kind of method determines date as well as time of whole amount related to catalogue
of business organisation. In assistance of this, their main focus is to satisfy needs and wants of
user during particular phase of time period. In context of chosen organisation, the management
team adoptdifferent way of administration in context of tracking stock or collecting important
information that is linked with present catalogue that help in appropriate determination for
requirement of stock in future period of time. The proper requirement of inventory management
system is managing whole record related to stock that help in removing different kind of issues
related to overstock & under stock in term of manufacturing(Järvinen, 2016).
LIFO signifies the stock that comes last which is adopted in process of production of
product and services.
FIFO Herein, in context of inventory administration system, the products received earlier
and utilised by organisation for the first time for process of production.
Average cost herein, this method of inventory administration is adopted for bringing stock
or inventory for fundamental price according to average price.
As per whole system related to inventory administration, the administration team of
chosen organisation can use FIFO technique as it is important for producing pharmaceutical
items that offer satisfaction by providing superior quality of goods to them.
Price optimization system is determined as a numerical examination through which
dissimilarity of command is planned at various extent of price that is determined as a price
optimisation system. In addition to this, the technique is used by administration team to handle
price related to input origin. According to chosen organisation, the management team can assess
response of user in respect of various procedures of goods which are produced by them. It helps
in setting cost of goods which is produced by organisation in such a way through which outcome
or result enhances profit margin of company. It is required to allocate price of product in proper
way that help in achieving outcome in future period of time.
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Cost accounting system this help in anticipation related to various goods of organisation
and considered elements connected with productivity, assessing stock as well as controlling cost.
It is significant for administration to analyse proper cost which is connected with product as
appropriate opinion in respect of process of commercial purpose. In addition to this, in context of
chosen organisation, the management team can execute this kind of method to analyse final stock
value, overall inventory of products in addition with process of work. The management along
with tool assist superior accounts by managing price related to equipment that is adopted during
manufacturing commodities like clothing, cost management system that is required in working
atmosphere to analyse price of diverse products for maintaining financial statement(Johnstone,
2018).
Job costing system the assistance of substance, labour, price for particular product is
formed that is determined as job costing system. This kind of method is used in producing
commodities which is differing from one another and determine significant cost of every item. In
reference of chosen organisation, a similar department is improved for accountability related to
administration cost in assistance with expenses of goods. The primary requirement of this kind of
methods to control products and value related to job finance by cover both actual prices to
provide appropriate outcome.
By adopting above given method, the administration team of chosen organisation to
manage appropriate record of operations in an appropriate manner within working atmosphere.
All this help in improving functioning that help in increasing profit margin of organisation.
P2. Different ways adopted for administration accounting reporting
Management accounting reporting
In business organisation, there is kind of book accounting report that are design and
possess significance while assigning data or information to higher authority. Accounting report
signifies preparation, assessing, implementation &appropriate determination during particular
phase of time period. This assignment designed by administration team in working atmosphere
as they provide accurate financial information. In addition to this, the administration team of
chosen organisation can use this kind of accounting reports that is given below:
Performance report with purpose of reviewing and assessing workforce as well as report
related to performance are maintained. These types of report provide comparison of
implementation along with tangible presentation &implementation in improvement.The
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differentiation is determined by assessing actual results and also performance are presented by
using this kind of report. The management team of organisation can control appropriateness as
which is arise in implementation of staff and assess performance level during particular phase of
time period(Leotta, Rizza and Ruggeri, 2017).
Budget report it is significant report that help in assessing financial implementation of
organisation in accounting time period. The management team improve organisational extent
which helps in framing budget for organisation. The manager chosen organisation can determine
previous performance related to financial that help in maintaining budget to accomplish proper
results in future period of time.
Inventory and manufacturing report the organisation focuses on estimating activity of
manufacturing, this type of accounting report help in maintaining acts which provide support on
recording manufacturing and use of product in order to appropriate use of activities. It signifies
proper sequence such as transparency, recording wastage as well as employment prices. The
management team of organisation focuses on comparing its prevailing record with ancient time
by using statement for assessing requirement related to increment. By controlling these, the
management team can use plan to implement inventory &assets in proper manner. Therefore, the
main focus is to appropriate use of resources and minimise waste during particular phase of time
period.
Account receivable reportthis type of report is maintained by organisation that helps in
assessing repayment related to uncertain record of finance. It signifies accounting related to
individual person according to time, outstanding length connected to statement. In addition to
this, the management team of organisation focuses on assessing financial decisions related to
user and improve report by adopting differentiation column for amount received as well as value
not received that help in assessing fault during particular phase of time period(Maas, Schaltegge
and Crutzen, 2016).
On the basis of above given accounting report, it has been analysed that it is necessary to
monitor or control over various cost and increasing development that help in achieving
favourable outcome in future period of time.
M1. Benefitsof management accounting systems
Accounting system Advantages
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Inventory management system The company appropriately maintain records related to
account and managed it appropriately. Therefore, the
chosen organisation can focuses on reducing waste and
enhanced production along with this tool.
Cost accounting system It is a useful for overseeing price of management and
monitor manufacturing surplus in organisation.
Price optimisation system It is important for assessing cost of goods and services. The
chosen organisation takes benefit or advantage by executing
this system that help in increasing efficiency and profit
margin.
Job order costing system This technique offer benefit or advantages in respect of
organisation in context of assigning task among workforce
as well as an administration according to goal which is
accomplished or achieved by them.
D1. Assessment of accounting systems as well as management accounting reporting
Management report as well as accounting system are determined or interconnected with
activity of company such as accounting system help in determination, dividing and assessing
organisation to operate manufacturing. Accounting report is helpful in designing or assessing
standard data along with tangible data which help in counter active accomplishments that used in
context of an organisation(Nielsen, 2018). The administration team focuses on using various
techniques such as price optimization, job order costing and so on that help in maintaining
budget report, performance and so on in to implement performance within industry. The
administration team of chosen organisation use this kind of system and maintained report that
help in achieving goal in timely manner.
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TASK 2
P3. Calculate costs by adopting proper tools of cost analysis
Marginal costing it is appropriate assessment processes that are highly adopted by company. It
is determined as a changeable price that involves substance costs, labour cost as well as many
more. This is used by administration team to assess overall cost on producing price of
commodity (Nuhu, Baird and Appuhamilage, 2017).
Income statement by marginal method:
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Absorption costing it is determined as a other method related to costing that analyse overall
expenditure related to producing of particular good of organisation. It provides accurate result as
all prices are determined in it(Pelz, 2019).
Income statement by using absorption method:
M2. Application of different management accounting techniques & manufacturing effective
financial reporting documents
The tool or technique of management accounting are executed by accountant of
organisation for appropriate implementation or maintaining records related to financial
information of organisation in proper way. The management team of organisation can use
different kind of accounting techniques related to marginal costing as well as absorption costing
that helps in maintaining payment for services. This kind of document is also used by other
parties which is stakeholder to make appropriate determination. The financial team focuses on
assessing all information and also maintain fiscal statement such balance sheet, cash flow
statement and so on. In reference of considering financial arrangements related to organisations
that help in achieving competitive edge during particular phase of time period.
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D2. Financial reports helps in understanding operational activities
Fiscal report is assessed as important document which is adopted by investor as well as
stakeholder in fiscal shape in accounting year. According to statistical information, in context of
income statement it is assess that the chosen organisation focuses on increasing profits level in
November as well as December. By using absorption cost technique, it is assess that the net
revenue or income for November month is around £7900, for December it is £8300. In addition
to this, at similar time by using subsidiary method of costing, the profit margin for November is
around £6100 December it is £10100. Therefore, the income statement determines overall
transaction that helps in interpretation related to performance of business organisation in an
appropriate manner.
TASK 3
P4. Explain advantages as well as disadvantages of various kinds of planning tools
This is determined as a record of pre-arranged assets. The income price for fiscal period is
estimated that reflect fiscal situation in addition with its aim. It is for 1 year that signifies cash
flow, income statement and so on. The higher authority focuses on maintaining budget and
converts them to follow by member of organisation as well as operate consequently(Quattrone,
2016).
Budgetary control
It involve process to make comparison among expected budget as well as actual
performance related to organisation that assists in filling gap of deviation and deal with such
kind of gaps. The management team maintain future budget and assists in designing different
budget. It involved in making appropriate coordination among various departments such as
production, human resource, finance and many more. There are various budgetary controls
executed by organisation that is going to be mentioned below:
Cash budget it signifies information regarding inflow & outflow of cash within an
organisation during particular phase of time period. The purpose is to maintain budget to assess
liquidator within an organisation and also assess availability of cash within company that help in
maintaining working expenditure. The budget assist management team to make appropriate plan
that is useful in future period of time.
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Advantages it is helpful in analysing need of cash in future period of time and eliminates
additional expenditure.
Disadvantage sometime, it generate over adoption of financial resources that is
determined as a disadvantage for budget.
Operating budget is connected with revenue and expenditure of specific operation like
sales forecast and so on. Therefore, it is maintained for short period of time and budget is
adopted by producing department for calculating revenue and expenditure that is connected to
production and manufacturing activity.
The advantages of this kind of budget assist in making another budget assist in
maintaining appropriate policy. All kind of budget must be centralised on budget sales, costand
many more. All functions related to accounting assists by management team to take decision for
betterment of company.
Disadvantage is not depending upon fulfilling objective of organisation that is depending
upon objective of company.
Master budget is determined as a combination of overall budget. All budget help in
finding or identifying variation related to other budget. It involves information regarding
account, statement which is for operations of company. It signifies goal of business organisation
that help in making appropriate master budget during particular phase of time period. It assists in
analysing cash flow and to achieve potential planning during particular phase of time period.
Theadvantage of budget is assessing overall performance of company and it assists in
tracking whole business and also assesses financial duties. It helps management team that there
is not any kind of deviation in work of business organisation(Samuel, 2018).
The drawback or disadvantage related to budget is depend upon daily activity of
organisation and that is easy in comparison made on regular basis. For this budget, it is necessary
to have superior skilled individual person that can easily read with matching daily activity that
increases cost for company.
M3. Use of planning tools
Planning tool is used in planning, forecasting and anticipating budget. This is determined is
a planning tool that is significant for monitoring overall activities of organisation. There is
different kind of planning such as cash budget, master budget that is adopted by management
team of organisation. All this kind of budget is advantageous for organisation to assess future
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expenses and revenue. By using appropriate application, the management team focuses on
forecasting budget that help in accomplishing aim &objective in timely manner. It will assist in
maintaining records as well as providing proper information regarding activity of organisation.
TASK 4
P5.Compare how company are using management accounting systems to provide response to
financial problems
Financial information is determined as a major issue that are confronted by every
organisation while conducting activities that is connected to finance. These issues occur due to
various factors or element like external forces, business cycle, internal factors and so on. For
resolving this kind of issues, the financial management is very important. There is different kind
of financial problem which is faced by them is going to be mentioned below:
Poor cash administration for organising operations of organisation in an appropriate
manner, it is important to handle cash in proper way. In context of chosen organisation, the
management team are not capable to handle cash in proper way because there is not of
appropriate information of stock, alteration in external environment and enhance competition.
Late payment by client every organisation possess some user while buying goods and
services on credit basis and they are not organise payment that imposes direct effect on budget of
organisation(Shields and Shelleman, 2016).
Management accounting approaches
There are various method related to management accounting adopted by organisation is
going to be mentioned below:
Benchmarking is determined as an accounting method that signifies organisation to
assess implementation of organisation by appropriate comparison with another one. It helps
administration team to assess different option related to growth or development. By using this
kind of method, the authority of chosen organisation compare a strategy with another one that
help in achieving or analysing fiscal issue during the period of time.
Key performance indicatorthis method helps in setting parameters in context of
assessing factor. It is determined as a positive evaluation that help in assisting monetary value
that help in solving different kind of problem related to finance. It is determined as a method that
helps in understanding and monitoring information of business organisation. It is very important
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in managing process related to finance information in assistance with document of organisation.
Therefore, the management team adopt accounting principle during particular phase of time
period. By using this, the organisation can solve different kind of problem related to accounting
during the period of period
Comparison among Connect Catering &other catering company
Connect Catering Other catering company
Problem the financial team of organisation
faces different kind of issues related to delayed
payment by its client that imposes direct effect
on performance of business organisation. Such
kind of issues are reduced by using
benchmarking method related to management
accounting that help in making appropriate
comparison in collecting cash from its client by
adopting method which is used by another
organisation.
Problem the issues and problems are assessed
by accountant of establishment that is suffering
from poor cash administration problem that
influence position of organisation at
competitive market. It imposes direct effect on
the various operationsrelated to budget.
Therefore this kind of issues is resolved by
adopting KPI tool and the administration team
focuses on assessing implementation of stock
transaction processing system.
System for resolving issues by providing
proper information related to finance, the
management team of organisation can use price
optimisation method related to management
accounting with aim of setting framework
related to price in addition with their main
focus is on putting credit information to pay
price on suggested time period.
System To resolve this kind of problem, the
administration team adopt inventory
administration in context of tracking stock and
record overall data or information on computer
system.
It is identified that Connect Catering is using
management accounting tools which assist
them to find out the exact financial position of
organisation. With the use of management
accounting tools they can easily find out the
It is analysed after comparison with Connect
Catering that Other catering companies are not
doing too much for their success and growth of
company. It is identified that they are not using
management accounting tolls so that they are
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profits in the organisation. They use cash flow
which helps them to find the liquidity position
of organisation. It assists them to take decision
of day to day operations.
not finding ten exact position of their
company. For example, Connect catering use
Profit and loss A/C or Income statement so that
they can know about their real profits which
assist them to take decision of further
investment. But other catering company is not
doing that.
M4. Management accounting solve financial issues that can results in sustainable success
Management accounting resolving issues by providing proper information related to
finance, the management team of organisation can use price optimisation method related to
management accounting with aim of setting framework related to price in addition with their
main focus is on putting credit information to pay price on suggested time period.
D3. Planning tools to solve financial problems
Planning tools helps in resolve this kind of problem; the administration team adopt inventory
administration in context of tracking stock and record overall data or information on computer
system. Therefore this kind of issues is resolved by adopting KPI tool and the administration
team focuses on assessing implementation of stock transaction processing system (Tucker and
Schaltegger, 2016). The Connect catering is more effective in resolving problem related to
finance during particular phase of time period. Therefore, there are different kinds of tools in
order to resolve financial problem in an appropriate manner. There are various tools which is
going to be mentioned below:
Financial planning: The primal objective of organisation is to increase profit margin in
future period of time. The goal is accomplished by making appropriate financial planning.
Therefore, financial planning is considered as superior tool for accomplishing objective in timely
manner. Therefore, it is assess that Connect catering adopt this tool that helps in resolving
different kinds of problem related to finance during the period of time.
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Cost accounting: There are different costs that enable the administration to decide reason
which is responsible for difference among cost. It is determined as appropriate tool helps in
resolving different kinds of financial problem.
CONCLUSION
On the basis of above given report, it is assess that management accounting helps in
providing financial data and information that determine various processes related to research and
administration of financial information in such a way that assists company to make plan for
upcoming period of time &maintain policy as well as possess appropriate control over whole
activity of company. This report provides discussion regarding management related to system
along with significance, requirement related to reporting procedure used for appropriate method
of cost analysis that help in preparing income statement by using amalgamation cost &
subsidiary cost.
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REFERENCES
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management accounting information systems, internal process performance, and customer
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Järvinen, J.T., 2016. Role of management accounting in applying new institutional
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Johnstone, L., 2018. Theorising and modelling social control in environmental management
accounting research. Social and Environmental Accountability Journal, 38(1), pp.30-48.
Leotta, A., Rizza, C. and Ruggeri, D., 2017. Management accounting and leadership construction
in family firms. Qualitative Research in Accounting & Management.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production, 136, pp.237-
248.
Nielsen, S., 2018. Reflections on the applicability of business analytics for management
accounting–and future perspectives for the accountant. Journal of Accounting & Organizational
Change.
Nuhu, N.A., Baird, K. and Appuhamilage, A.B., 2017. The adoption and success of
contemporary management accounting practices in the public sector. Asian Review of
Accounting.
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.
Quattrone, P., 2016. Management accounting goes digital: Will the move make it
wiser?. Management Accounting Research, 31, pp.118-122.
Samuel, S., 2018. A conceptual framework for teaching management accounting. Journal of
Accounting Education, 44, pp.25-34.
Shields, J. and Shelleman, J.M., 2016. Management accounting systems in micro-SMEs. Journal
of Applied Management and Entrepreneurship, 21(1), p.19.
Tucker, B.P. and Schaltegger, S., 2016. Comparing the research-practice gap in management
accounting. Accounting, Auditing & Accountability Journal.
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