Management Accounting Systems, Reporting, and Integration Analysis

This report provides a comprehensive overview of management accounting, detailing its core concepts and the various systems employed within organizations. It begins by defining management accounting and its role in providing financial information for internal decision-making, contrasting it with financial accounting. The report then explores different types of management accounting systems, including cost accounting, inventory management, job costing, and price optimizing systems, highlighting their advantages and applications, specifically using Prime Furniture as a case study. Furthermore, it examines various management accounting reporting methods such as budget reports, accounts receivable aging reports, and job costs reports. The report emphasizes the importance of integrating these systems and reporting methods within an organization for overall growth and success. The conclusion summarizes the key takeaways, emphasizing the significance of management accounting systems and reporting in enhancing business operations and performance.

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Management accounting and types of management accounting systems....................................1
Management accounting reporting methods................................................................................3
Integration of management accounting systems and reporting within organisation. ..................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Success and growth of organisation depends on the internal management of operations of
company. Internal management includes using number of tools and techniques that are essential
for achieving the growth and success of organisation. Management accounting is related with
application of range of systems and procedures for improving the efficiency and effectiveness.
This reports include the importance of management accounting, systems of management
accounting and the methods used in management accounting reporting. It will also cover the
benefits of using management accounting systems and integration of management accounting
systems and reporting in the organisational context. Study will enhance the understanding about
the management accounting systems.
Management accounting and types of management accounting systems.
Management accounting
It is a method of providing the financial informations and the resources to managers in
the decision-making. Management accounting refers identifying, gathering, analysing and
interpreting the financial information for the business enterprise. Management accounting is
used by company for improving the internal management of company. Organisations use
management accounting for statistical data for taking the better and accurate decisions,
controlling the business expenses and developing processes that will be enhancing the efficiency
and productivity of company (Otley, 2016). It is different form financial accounting that
provides information to the external users for decision-making.
Different systems used in management accounting systems and its advantages.
Cost Accounting
Cost accounting refers to the process concerned with calculating the cost of products or
services. It includes identifying all variable and fixed costs for manufacturing organisation. It
records all the costs and expenditures for making more accurate decisions thatg are essential for
controlling the costs and improving the productivity.
Advantages
Cost accounting helps prime furniture in measuring the costs incurred for producing the
furnitures. This also helps in keeping the costs under control by reducing the unproductive
activities.
Application
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It is applied by Prime furniture in the manufacturing process for deciding the reasonable
profit margins of company.
Inventory management systems
Inventory management systems is used for monitoring and keeping check of the
inventory movement in the organisation or production processes. It involves combination of
technology so for identifying the consumption of raw materials, finished goods produced or all
the other matter related to inventory (Jiambalvo, 2019).
Advantages
The system is essential for reducing the errors and mistakes in managing the inventory.
Company using this systems can make future forecasts about the consumption and demand.
Application
It is used by Prime Furniture for tracking the stock levels of raw materials and finished
products for making purchase orders on time.
Job Costing Systems
It is a system for identifying the cost of each job separately. The system gives complete
cost details for making the completing the product or activity. It is also defined as method to
record the costs of manufacturing a job rather the process involved in manufacturing. It includes
all costs like materials, labour and overhead more specifically.
Advantages
The systems helps Prime furniture in keeping track of all the costs associated with
particular job. This provide important information to the managers for measuring the profitability
of business.
Application
It is applied by Prime furniture for calculating the costs of special orders separately from
the regular process. So that the profit margins could be decided by company.
Price Optimising systems
This is systems or process using mathematical programs for measuring the variation in
demand at the different price level. The outcomes are combined with the information related to
the stocks and inventory levels for recommending the prices for improving profits (Schaltegger,
Burritt and Petersen, 2017).
Advantages
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This systems helps in measuring the variations in demand that is important for making
decisions related to future production activities.
Application
The system is used by Prime Furniture for forecasting the demands of future, and
defining the price levels accordingly.
Management accounting reporting methods.
Budget Reports
Budget reports refers to map of organisation income and expenditures. It provides the
organisation a specific direction to follow in organisation. It helps the organisation in keeping the
expenditures under control. Also the budget reports enables Prime furniture in making
comparisons between the budgeted and actual outputs of company.
Accounts Receivable Ageing Reports
It is a report that identifies the accounts receivable that are due from long time. These
reports are used by organisation to take strict actions against the receivables due from long time
or whether to write them as bad debts. This report helps Prime Furnitures to short list the
defaulters so that further transactions are not carried out with defaulting parties.
Job Costs Reports
Job costs report provide information about the cost associated with each job separately. It
provides detailed information regarding the costs of job (Maas, Schaltegger and Crutzen, 2016).
It helps Prime furniture in pricing its products and services by measuring cost of each job
separately.
Inventory and manufacturing reports
Inventory and the manufacturing reports contain all the details about the inventory
available with the organisation and the time within which the purchase orders should be made by
company so that the production process is not interrupted due to lack of inventory.
Integration of management accounting systems and reporting within organisation.
Management accounting systems are used for managing the processes of organisation. It
provides specific path so that every event and transaction is having the right platform on which
the operations are based. On the other hand management accounting reports provide the results
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of operation applying the management systems. Based on the reports produced company take
steps for improving its performance and productivity (Appelbaum and et.al., 2017). Both systems
and reporting is integrated for the overall growth and success organisation
CONCLUSION
From the above research it could be concluded that management accounting systems and
management accounting reporting are very essential for the business enterprise. The systems like
inventory management, job costing and price optimization systems are essential for the business
for managing the business operations. On the other management reporting like budget, account
receivable, inventory reports helps the management in improving the performance of company.
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REFERENCES
Books and Journals
Appelbaum, D. and et.al., 2017. Impact of business analytics and enterprise systems on
managerial accounting. International Journal of Accounting Information Systems, 25,
pp.29-44.
Jiambalvo, J., 2019. Managerial accounting. John Wiley & Sons.
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.
Otley, D., 2016. The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, pp.45-62.
Schaltegger, S., Burritt, R. and Petersen, H., 2017. An introduction to corporate environmental
management: Striving for sustainability. Routledge.
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