Detailed Report on Management Accounting Systems and Methods

This report provides a comprehensive overview of management accounting systems, which are crucial for providing accurate financial information to managers for decision-making. It covers different types of management accounting systems, including cost-accounting, inventory management, job costing, and price optimizing systems, detailing their functions and benefits. The report also discusses methods used for management accounting reporting, such as budget reporting, cost reporting, and performance reporting, highlighting their importance in analyzing performance, computing costs, and assessing revenues and expenditures. The conclusion emphasizes the importance of choosing the right management system to enhance an organization's profitability and growth, referencing key works in the field to support its analysis.

MANAGEMENT
ACCOUNTING

MANAGEMENT ACCOUNTING
Management accounting is the process of
presenting reports and accounts that are
relevant for management. These reports and
accounts provide concise, to the point and
accurate financial information that is required
to make short term as well as long term
decisions by the mangers.
Management accounting is all about
generating weekly and monthly reports for the
internal audience of the company such as
managers and top managerial personals.

CONTINUE……
Management accounting combines accounting,
finance and management under the same
head as it integrates the benefits of all the
three. Management accounting is vast in its
scope and helps the organisation to run
smoothly.

DIFFERENT TYPES OF MANAGEMENT
ACCOUNTING SYSTEMS
 Cost-Accounting Systems
 Inventory Management Systems
 Job- Costing Systems
 Price- Optimising systems

CONTINUE…..
 These management accounting system vary
in their use.
 All the above systems are designed to give
management of an organisation the
information that will help them to make the
decisions for the betterment of the
organisation.

COST-ACCOUNTING SYSTEM
 Cost- accounting system is also called as
product costing system.
 This framework is used by the firms to
estimate the accurate cost of the product.
 With the help of this method the products
cost is estimated for profitability analysis,
cost control and inventory valuation.

CONTINUE….
 The cost accounting system is further
classified into:
 Job order Costing
 Process Costing.
 In the cost accounting system, the allocation
of cost is done on the basis of either activity-
based costing system or traditional costing
system.

INVENTORY MANAGEMENT SYSTEM
 Inventory management system is the system
of supervising the stock items and non
capitalised assets (inventory).
 Inventory management system is a
component of supply chain management.
 This system keeps a track of the sales order,
inventory levels and deliveries made.
 This is also helps in creating production
related documents.

FUNCTIONS OF INVENTORY
MANAGEMENT SYSTEM
 Relocate, receive and inventory disposal.
 Purchase order creation
 Sales order creation
 Physical inventory counts

BENEFITS OF INVENTORY
MANAGEMENT SYSTEM
 Improvement in the organisations bottom
line functions.
 Improves the accuracy of the inventory.
 Improves the workflow of the organisation.

JOB COSTING SYSTEM
 This system is ideally for assigning cost of
manufacturing to the individual product or
batches.
 This system is generally used when the
products manufactured are sufficiently
different from other products.
 This system ascertains the information
about the cost associated with the specific
product.

CONTINUE…..
Job costing system main purpose is to
accumulate the information about these three
costs majorly these are:
 Direct Labour
 Direct Materials
 Overhead Costs.