Management Accounting Systems and Techniques Report Analysis

This report provides a comprehensive overview of management accounting systems and techniques, focusing on their essential requirements and applications within an organization. It begins by defining management accounting and its role in providing financial information for internal decision-making, using Renishaw plc as a case study. The report explores various management accounting systems, including cost accounting and inventory management, detailing their functionalities and essential requirements. Different methods used for management accounting reporting, such as cost reports, budget reports, and performance reports are also examined. Furthermore, the report delves into cost analysis through income statements, and the application of planning tools for budgetary control. The advantages and disadvantages of these planning tools are discussed, along with how management accounting systems can address financial problems. The report concludes by emphasizing the role of management accounting in fostering sustainable organizational success.

Management
Accounting Systems &
Techniques

Table of Contents
INTRODUCTION ..........................................................................................................................3
P1) Management accounting and its essential requirement ..................................................4
P2) Different method used for Management accounting report ............................................6
M1) Benefits and application of management accounting system.........................................8
D1) Evaluation of integration of management accounting system and reporting .................8
TASK 2............................................................................................................................................9
P3) Cost analysis through preparation of income statement.................................................9
M2) Management accounting techniques to produce financial reports................................15
D2. Interpretation of data.....................................................................................................15
TASK 3 .........................................................................................................................................16
P4) Advantage and disadvantage of Planning tools used for budgetary control .................16
M3) Application of planning tools for preparing and forecasting budget ...........................19
TASK 4 .........................................................................................................................................22
P5) Adoption of management accounting systems to respond to financial problems..........22
M4) Management accounting lead an organisation to sustainable success .........................24
D3) Planning tools for accounting help to solve problems and support organisation with
sustainable success ..............................................................................................................25
CONCLUSION .............................................................................................................................25
REFERENCES..............................................................................................................................25

INTRODUCTION
Management accounting is a tool used for effective presentation of financial information
and resources required by internal management to formulate policies and planning for
undertaking proper decision making. The main purpose of management accounting is timely
recording of day to day transaction in a proper and most presentable way so that it can be
understand easily. Management accounting also provide a easiest way for communicating current
position of an organisation (Hosseinzadeh and Davari, 2018). A effective management
accounting system provide proper accounting reports and budgetary control which ensure timely
completion of work thus facilities better performance and future growth of an organisation . It is
the responsibility of management accounting system to mange a wide range of critical
management accounting information through using various techniques like cash budget,
marginal costing, absorption costing and many other relevant management reports.
For this assignment, Renishaw plc is selected which is a British engineering company
well known for its coordinate measuring machine and machine tool products. It is a leading
company in metal additive manufacturing (The top UK engineering firms for fresh graduates,
2019). The headquarter of Renishaw plc is in Wotton- under- Edge, Gloucestershire, UK. This
report includes essentials and requirement of different type of management accounting systems
and also explain different methods used for management accounting reporting. Calculation of
cost with appropriate techniques and income statement using marginal and absorption costing is
also form a part of this report. It also include advantage and disadvantage of different types of
planning tools used for budgetary control. At last, use of management accounting system to
effectively handle or address financial problem is also included in this report.
TASK 1

P1) Management accounting and its essential requirement
Management accounting is a system that includes timely presentation of financial
information and proper recording of day to day transition in form of statistical data which used
by top management and other authorities for preparation of proper budgets and strategies, and
also helps in maintaining a good control and monitor over all performance of an organisation
(Oldman and Tomkins, 2018). It involves preparation of various management accounting and
budget which are helpful in formulation and implementation of various plans and polices needed
for betterment and growth of organisation. All these documents and reports are very useful for
stakeholders as they represent the current performance and situation of an organisation and
provide all relevant information about upcoming opportunities that can be garbed by an
organisation for ensuring future growth. Thus, the main aim of management accounting is to
keep a check and control over different expenses and cost of organisation to achieve the target of
cost effectiveness and profitability. Renishaw plc is also making use of various types of
management accounting system which are explained below.
Various types of management accounting system and their essential requirements
Management accounting system- It is basically a internal system of organisation used
for measuring and evaluating its processes for better management of organisations. Management
accounting system includes application of various system which are explained below:
Cost accounting system – It is an accounting process or framework helpful in estimation
of cost involved in production of an article. It is very essential for an organisation to analysis its
cost for properly determining its profit level. Cost accounting system facilitates proper valuation
of stock or inventory which is very help full in overall cost control of production process. This
process of estimation of cost of production is very critical as well as very crucial for every
organisation as overall productivity and profitability of business depends on this. It helps in
taking decision that which product is more cost effective and profitable for the business
organisation and thus helps in decision making about the product in which it should deal to
maximize its profit (Agrawal, 2018).
Cost accounting system provide approximate value of opening and closing raw material,
work in progress and amount of finished good. This information is necessary for calculation of
data needed for preparing financial statement and other documents. Renishaw plc can make use
of this cost accounting system as it helps in measurement and improvement of efficiency through

implementation proper cost control and also helps in fixation of prices of product. To properly
implement a cost accounting system in any organisation, some essential requirement must be
fulfilled which includes proper coordination and participation of all executives from different
departments of a firm. It is also necessary that proper balance should be maintain between cost of
instillation of system and its future benefits. It also necessary that cost accounting system should
not reduce the utility of organisation through making tasks and activity mare complex and rigid.
In Renishaw plc proper measures are adopted to implement the cost accounting system to
maintain the authenticity of decision making.
Inventory management system - It is a procedure used for monitoring and controlling
stock of raw of material to keep a balance between demand and supply of raw material. It is very
important to maintain a adequate amount of inventory to ensure uninterrupted production of
product but keeping a huge amount of stock is also very risky and costly. So proper accounting
for inventory management is necessary to reduce the cost of warehousing and other expenses
required for safely storing the material (Weetman, 2019). A proper and effective communication
with supplier of raw material is necessary to ensure the timely availability of stock. Proper
analysis of demand of the product is also essential before implementation of an inventory
management system. Proper controlling and auditing techniques are also an essential requirement
for inventory management system. Inventory management system is useful for Renishaw plc as it
keeps a track on inventory and offers a centralised view of stock. It also helps in controlling costs
through making proper stock reports and also manges planing and forecasting of inventory. The
main methods for inventory management are explained below, Renishaw plc can select anyone
of these methods for effectively managing its inventory or other stock: First in first out (FIFO) – Under this method inventory purchased or entered warehouse
first is put to use on priority basis and the newest inventory entering the warehouse last is
used at the end after all old inventory is used, thus the cost paid for oldest products are
used for calculation of cost of product. Last in first out (LIFO) – This method is just opposite of LIFO, under this method
inventory entering the warehouse last is put to use first. Thus, the cost which is incurred
for newest stock is used for calculation of cost of inventory.

 Weighted average method – This method is mainly adopted for valuation of inventory
and average cost of inventory is assign to each and every piece of inventory at the tie of
selling that product.
 Economic Order Quantity (EOQ) – This method helps in calculation of that number of
units of raw material that a company should buy at one time to minimize the total cost of
inventory by reducing holding cost and order cost (Roussy and Rodrigue, 2018).
Renishaw plc is a manufacturing company, so it is necessary to maintain sufficient
amount of inventory with lower holding and storage cost, therefore for them EOQ method is
most suitable. EOQ is useful for Renishaw plc in reducing the holding cost of inventory as EOQ
system eliminates the need of having big warehouse to store goods as under EOQ company
orders raw material in limited quantity to ensure that the current production process does not
come to a halt.
Price optimisation system – This method is used to analysis the change in response of
customers on different prices offered for a particular product, hence helps in determining the best
suitable price for an organisation to meet its objective and also to achieve maximum operating
profit. Renishaw plc can make use of this method as it provide proper strategies for regulating
pricing decisions and helps in obtaining accurate price for its product which foster sales of its
product and also yield higher profits (Tools and techniques of Management Accounting. 2019).
The essential requirement of price optimisation system includes availability of past records to
properly analysis the pricing strategy of competitors and to get information about economic
conditions. After proper analysis of all the the records and strategy a price is set for the product
to maintain a balance between demand and profit margin . Price optimization system is essential
for Renishaw plc to analysis its business environment and pricing strategy of customers to fix a
most suitable price for its product.
P2) Different method used for Management accounting report
Various methods are used by business mangers for effective reporting of management
accounting which facilitates proper management and decision making and also allows timely
performance analysis of on organisation to promote better control. Management accounting
reports are used for keeping records of day to day operations which facilitates easy planning and
design making. Some of the important methods which are used by Renishaw plc for
management accounting are discussed below :

Cost Reports: Management accounting is having a crucial role in calculation of cost of
an product and services which is very essential for determination of product price. A proper
report or document is prepared by accounting mangers to facilitate easy decision making
regarding the price of an product as overall demand of product and profitability of organisation
depend on price of an product (Jefrey, 2018). Renishaw plc is making timely cost reports to
analysis the amount of cost and expenses and to keep a check on wasteful activities to reduce the
overall cost and to increase the overall profitably.
Budget reports – This report is used for making comparison between actual performance
and estimates made to analysis the current performance level of an organisation. All the sources
of income and areas of expenses are included in the budget and it also provide knowledge about
operating and net profit thus, it as considered as most fundamental and basic report which is
maintained by all organisation. Budget is having a similar format like an income statement and
also includes sales and cost of good sold. It is basically divided into parts in which one is
showing actual data and the other part is showing budgeted data to facilitate easy comparison of
facts. Positive difference is the indicator of good performance where as adverse or negative value
shows the weak position. Timely budget reports are prepared by Renishaw plc to keep a check
on performance level and profitability (Abernethy and Wallis, 2018). Budget reports are also
useful in keeping a check on amount of actual expenses through properly comparing its with
budgeted expenses thus, a check and control over wasteful expenses are also kept through using
budget reports.
Performance reports - This report provide a deep review and analysis of performances
of an organisation and also proved information about efficiency level of workforce for a specific
time period. Timely performance analysis of employees is very essential to ensure the better
productivity and growth of an organisation in future. Main aim of performance reports is to keep
a check or monitor the working habits of an employee to motivate them for improving their
efficiency and productivity and to achieve this aim, use of incentives and reward is also made.
Renishaw plc should also prepare timely performance reports for early detection of problems and
flaws exit in any operation of organisation so that corrective action can be taken on time for
improving overall performance of organisation. Performance report makes Renishaw plc able to
gather all the essential and relevant data that helps in stimulating discussion and identifying new
opportunities which should be explored to enhance the process optimization.

M1) Benefits and application of management accounting system
Management accounting system are very beneficial for every organisation as it provide
all relevant and accurate information in form of statistical data which facilitates easy and proper
decision making for controlling all the activities and operations of an organisation. It is also used
by various stakeholders and other related parties to know about the current performance and
situation of organisation (Quinn and Oliveira, 2018). Importance and benefits of proper
application of different accounting system for Renishaw plc are explained below :
Management accounting system Benefits for Renishaw plc
Cost accounting system Application of cost accounting system is useful
for Renishaw plc in calculation of total cost of
a product for improving and measuring
efficiency through reducing cost of production
and meeting objective of cost efficiency.
Price optimisation system Implementation of this accounting system is
very useful in selecting most suitable price for
a product which will maintain an adequate
amount of profit margin for Renishaw plc and
at the same keep a good level of demand for
product.
Inventory management system Inventory management is very crucial for
Renishaw plc as it a manufacturing company
therefore, maintaining an adequate amount of
stock is very necessary. This accounting also
helps in reducing wastage of stock and raw
material through effective management and
control.
D1) Evaluation of integration of management accounting system and reporting
Type of reporting & Systems Integration with organisational process

Inventory management report: This report
is developed on the ground of combination
of information collected from system.
Integration of reporting system with
organisational process can be easily understood
through this point as it is helped Renishaw plc to
mange its raw material effectively which is
needed at different level of demand.
Performance report: This report is
prepared on the basis of information
collected from different systems of
organisation and all include all relevant
information about performance of Renishaw
plc.
Integration of performance report with operation
has provide specialisation to Renishaw plc as all
the misalliances and deviations are timely
removed with the help of this report (Cockcroft
and Russell, 2018)..
TASK 2
P3) Cost analysis through preparation of income statement
Income Statement – It is one of the most important financial statement provide
information about actual or current financial performance of an organisation for a specifics
accounting period. Its main focus is on different sources of company's revenue and expenses for
a particular period of time (Gawin and Marcinkowski, 2019). Income statement is very useful for
stakeholders as provide all relevant information about organisation and helps in taking
investment decisions.
The main methods used for preparation of income statement are :
Marginal costing – Under this costing technique, fixed cost is taken as periodic cost
which is written off against contribution where as variable cost is treated as unit or product cost.
Marginal cost implies the additional cost involved in producing an extra unit of product or
output.
Absorption costing – Under this type of accounting method both fixed cost and
variable cost are included in cost of product and equally distributed to each unit produce.
Absorption costing is a method which capture all costs associated with manufacturing a product.
ANNEX (A)

C. Reasons for the difference in the profit figures for the above two methods
The amount of profit is different through using absorption and marginal method because
in marginal costing only variable cost is included to calculate net profit but in absorption costing
both fixed and variable cost are included to calculate the amount of net profit.
ANNEX (B)

M2) Management accounting techniques to produce financial reports.
There are many management accounting techniques used for preparation of financial
reports as in above part absorption and marginal costing is used for preparation of financial
reports of Renishaw plc. Some of the other techniques which can be used preparation of
financials reports are :
Activity based costing – It is an activity based costing method under which cost of each
activity is calculated separately. This cost is assigned to each activity or product or services on
the basis of actual consumption and expenses created for each task (Scott, and et. al. , 2018).
Standard costing method – This accounting system is based on estimations made for
achieving the desired level of production, standard are set at the starting of a period which are
used for overall planning and production process and at the end of accounting period actual
performance is compared with these standards.
Financial reporting documents
Theses documents are used to provide an overview of financial results and performance
of an organization. Some of the essential financial reporting documents are explained below:
Income statement- It provide information about expenses, revenue and profit/loss earned
or generated by an organisation in a reporting period. Income statement presents the information
about operating results of a firm.
Balance sheet- It shows the information about assets, liabilities and equity of an
organisation on a reporting date. Balance sheet provide information about financial conditions of
an origination on a specific point of time.
D2. Interpretation of data
Financial reports are used to analysis the results of various operations, cash flows and
financial position of an organisation. Such reports are prepared through integrating data of daily
bookkeeping which record all monetary transaction. As per the above financial statements, it can
be analysed that net income of 112569 £ is earned through absorption costing method. In
contrary, with marginal costing approach, analysed profits are 150750 £.

TASK 3
P4) Advantage and disadvantage of Planning tools used for budgetary control
Budget – This tool provide the estimation of all the income and expenses of an
organisation in a written form for a fixed span of time. It is a financial plan prepared by
accounting mangers for a fixed period of time indicating the sales revenues and all other
incomes, expenses and cost. Proper analysis of these aspects is necessary for forecast or
estimation of financial performance and productivity of an organisation(Johnstone, 2018) .
Budgetary control – It is basically a process used by an organisation to control its cost
through preparation of proper budget and comparing data of these budgets and estimates with
actual performance. This comparison is helpful in analysing the gap between actual and desired
level of performance and also indicates the flaws and wasteful activity which can be reduced for
achievement of target of cost effectiveness and high profits. The main aim of budgetary control
is to create a proper control on all the activities of an organisation to mange the overall cost and
increase the profitability.
Planning tools for budgetary control– Every organisation make use of some planning
tools and techniques to control and monitor its working and different operations. The main
purpose of using planning tool is to reduce the volume of wastage and to achieve the aim of
minimizing cost of production (Hughes and Williams, 2018). Renishaw plc is also making use of
planing tools for controlling its cost of production and other activities, some of these planing
tools are explained below:
Cash Budget
Cash budget is used to show the current as well as future cash position of any
organisation (What is a Cash Budget?, 2019). It represents the different sources of finances from
where cash or finance can be generated to meet the different working requirements of
organisation and also shows the disbursal of cash for meeting various expenses. Mainly
organisation prepare cash budget for one year which is further separated into parts to show the
monthly information of cash flow. Renishaw plc is making use of cash budget to clearly
represent the inflow and outflow of cash which makes it easy to maintain an adequate amount of
finance to meet the day to day requirements and expenses. Cash budget is prepared to calculate
the budgeted cash flows during a specific period of time thus useful in determining optimum

level of cash thus lead to budgetary control of cash flow. Other benefits and disadvantage of cash
budget are explained below:
Advantages Disadvantages
Cash budget provides better monitoring and
control over expenses of different operations
and department through clearly showing the
disbursement of cash for each department.
Non cash or non financial incomes and
expenses (like depreciation on asset) are not
included in cash budget thus does not reveal
actual position of organisation.
Cash budget provides or facilitate ease in
performing day to day operations through
maintaining an adequate balance between
available cash or finances and working capital
requirement (Booth, 2018).
Cash budget does not provide factual
knowledge as it is totally based on estimates
and future forecast about incomes and sales
revenue.
Master Budget
It is necessary for all functional divisions and departments to maintain proper budgets for
their department or operation, all these budgets are combined or integrated into a common or
single budget which is known as master budget. It provide a holistic or complete overview of
business activities and its departments through compiling and collecting information from all the
relevant budgets. All other budgets like production, sales, overhead, labour, etc. are included in
master budget. Renishaw plc is a manufacturing company therefore, it is necessary to keep a co-
ordination between all the activities and for that purpose master budget is prepared by them
which provide complete overview of business organisation. Master budget is a central planing
tool which lead to budgetary control through directing different activities of organisation as well
as also judge the performance of various responsibility centres. Following are the other benefits
and drawbacks of master budget:
Advantages Disadvantages

Departments which are having high operation
cost are easily detected as a comparison
between all budgets is provided thus it helps
Renishaw plc in reducing wasteful activities.
Master budget includes detailed description and
information of all other budgets, thus
modification of data is very difficult (Singhvi
and BODHANWALA, 2018).
Cross check and verification of all other budget
become more easy as, a summary of all
relevant budget is provided in master budget.
It does not provide specific information about
any department or operation thus lacks
specificity of data.
Provides information about all the aspects or
factors needed for calculation of profit and
provide a more clear picture of activities for
preparation of balance sheet through providing
all information at one place.
Complexity level of master budget is very high
as all the income and expenses of different
departments are included in it thus, it is hard to
understand an mater budget.
Zero base budget
Under this method of budgeting proper justification is made for all the expenses for each
new period. The process of this budget starts from starch level therefore, every new activity in an
organization is analysed from its starting till end to evaluate the requirements and cost. On the
basis of this evaluation zero base budget is made for upcoming period which shows different
values may be higher or lower than the previous budgets. Renishaw plc is making use of this
method of budgetary control as all the expenses created for an activity are calculated on equal
basis and not on differential basis thus, provide actual and most authentic information about
income and expense (Singh, 2018). Zero base budget lead to budgetary control through reducing
unnecessary cost. Zero base budgeting includes looking into areas where cost be reduced trough
properly analysing a project.
Advantages Disadvantages
It does not make use of traditional or out dated
method of accounting thus, eliminates wastage
of resources on old and unnecessary activities
and provide new ways for calculating expenses
Effective training and knowledge of employees
is must for making use of zero base budgeting
as, deep and proper knowledge of each aspects
and financial factors of business is require to

and income. make a budget from starch level for a new
activity.
It is most effective method to reduce the
amount of cost and expenses for an activity as
resources are allocated on the basis of current
needs and requirement with proper explanation
about its benefits thus, helps in reaching the
objective of cost effectiveness.
Proper justification is required for each expense
made for an activity, thus it is a more time
consuming process of budgeting (Piercy,
2018).
M3) Application of planning tools for preparing and forecasting budget
Planning tools are helpful in preparation and forecasting of financial statement and other
financial budget. Forecasting includes an estimation about future activities and happening and
also includes impact of theses activities on sales and profitability of an organisation. The
different planning tools like cash budget, master budget, zero base budget, etc. includes proper
decimation and forecasting of various financial aspects like estimated sales revenues, expenses,
cost, etc. thus, provide all the relevant information required for preparation of financial budget
and balance sheet which show the overall performance of an organisation. Renishaw plc is
making use of master budget for evaluation of profit earned in a specific period through
combining information from all the relevant budget (Bai, Koveos and Liu, 2018). Cash budget
which is an important planning tool provide best possible estimation about future inflow and
outflow of cash on which the total efficiency of all the operations depends. Zero base budgeting
is most useful for making estimation of income and expenses for a new activity and provide a
cost effective budget for completion of any task.
ANNEX C

NPV Product X Product Y
NPV = Dis Cash flow – Initial
Investment
= 5416.647 – 5000
= 416.647
= 7182.647 – 8000
= -817.353

TASK 4
P5) Adoption of management accounting systems to respond to financial problems
Financial problems : These are mainly related with adverse situation where organisation
is facing some problems or issues to meet its requirement or objectives. Financial problems are
mainly crated due to lack of adequate funds which make it difficult to make purchase of raw
material and also create issues in hiring and motivating workforce which will ultimately reduce
productivity and sales revenue (Crowther, 2018).
Reasons for financial problem : There are many reasons which can create financial
problems for an organisation like excessive fluctuation in business environment, lack of
budgeting and money management skills, sudden decrease in profit and other revenue and
sometime family or medical issues also create financial problem. The main financial problems
and crises faced by Renishaw plc are as follows :
 High cost of production – The biggest problem Renishaw plc is facing is that, it is not
able to reduce the cost of production and not having an effective control on wasteful
activity which will ultimately results in reduction of profit.
 Inefficient accounting system – The management team of Renishaw plc is not much
effective and they are not having desired level of talent and skills to implement the best
tool and techniques for conducting an effective control and are also not maintaining
timely budgets hence, creating hinders in achievement of goals.
There are any performance management techniques and strategies which can be used by
any organisation to solve its financial problem, some of these techniques are explained below:
 Key Performance Indicator (KPI) – It is an instrument used for timely evaluation of
performance and success of an organisation and its employees to keep a check on overall
effectiveness and growth of an organisation. It is basically an indicator used for showing
the strengths and meekness of an organisation in meeting the desired objectives and
targets (Rezaee and Wang, 2019). To identify the reason of high cost of productions use
of KPI is made which has showed that cost of production has increased by 15% from last
year because of increase in some wasteful activities.
 Benchmarking – It provides information about the maximum level of performance or
growth that can be achieved by an organisation with best and most effective use of all the
resources. It helps in finding the gap between current performance and desired targets

thus provides opportunity to fill those gaps to achieve the objectives and targets. This
technique is very helpful in motivating employees and analysing current performance of
organisation through comparing it with benchmark. This technique is mainly used to
improve the sales of organisation through comparing whether the benchmark of sales is
achieved or not.
 Variance analysis – It is a quantitative investigation of difference between actual and
budget data. Positive difference is a indicator of good performance where as negative
data shows bad or ineffective conditions of organisation. It is used by organisation to
compare its actual performance with budgeted to check whether desired objectives are
met or not.
To understand the effectiveness of these techniques in addressing the financial problems, use of
following examples are made where Renishaw plc and Cobell are manufacturing company and
facing some financial crisis.
Renishaw plc Cobell
Financial
problem
It is facing problem of high production cost
and inefficient accounting system (Berry,
Broadbent and Otley, 2019).
Despite of all the efforts made
it is not able to meet its
objective and targets of future
growth.
Approach Timely variance analysis can be used to
address the problem of high production cost,
as it provide better control on cost through
measuring difference between actual and
budgeted cost, thus provide sufficient time to
take some corrective action to minimize
wastage for reducing cost. Use of key
performance indicator can be made to keep a
check and monitor the effectiveness of
employees to motivate them for maintaining
timely financial budgets and reports.
Use of benchmark technique
can be made to find the gap
between current performance
and desired targets so that
efforts can be made in correct
direction for achievement of
objectives and growth
(Mohamed and Waguih, 2018).

Management
accounting
system
Use of cost accounting system can be made by
Renishaw plc to minimize or reduce its cost of
production through having a proper control or
check on expenses.
Cobell can make use of price
optimization to set a price
which will attract more
customers and also maintain a
good profit margin to meet its
objective of growth.
M4) Management accounting lead an organisation to sustainable success
Management accounting system like cost accounting system, inventory management
system and price optimization system address or solve various financial problem of an
organisation. Cost accounting system reduce the cost of production which safeguard an
organisation from situation of adequate finance. Inventory management system is used for
managing an adequate amount of stock in organisation thus, reduce chances of production failure
and ensures smooth flow of operation. Price optimization is useful in fixing a suitable price for
product thus, ensure growth of organisation through attracting more customers and ensures a
good amount of profit.
Sustainable success basically means the achievement of targets and objectives of all
stakeholders and related parties through maintaining a coordination between needs and wants of
all. The main of sustainable development is to achieve all the desired goals of an organisation
without much effecting or harming the natural resources, environment and society and it can be
achieved only through making effective and proper decision for overall benefits of organisation
and society. Many people are included in stakeholders of an organisation like its partner,
shareholders, customers, suppliers, and all other related parties like government and society. An
organisation can achieve sustainable success only through fulling needs and desires of all theses
parties. Use of management accounting techniques is made by an organisation to properly
combine or interlink business acumen and finance expertise to bring a coordination between
needs of all stakeholders and it also facilitates proper decision making in favour of all
stakeholders. Thus, use of management accounting is helpful in attaining sustainable success as
it reduce the wasteful activities and keep a check on production process to control pollution
thus, save natural resources and environment and helps in taking a mutual decision in favour of
both organisation and its stakeholders.

D3) Planning tools for accounting help to solve problems and support organisation with
sustainable success
Use of different planning tools like mater budget, cash budget and zero base budget is
made to face and handle the adverse situation through properly estimating and forecasting about
future contingency. Planning tools create a better atmosphere in organisation through properly
maintaining control and monitoring on all activities thus, provide solution to many problem and
enhance productivity of organisation. Cash budget ensures adequate supply of cash and maintain
liquidity in organisation thus, safeguard an organisation from adverse situation of non
availability of cash to meet the day to day operation, thus facilities uninterrupted flow of
operations and production process. Timely preparation of budget keeps a check on expenses and
activities of organisation thus, reduce the chances of wasteful activates which can have negative
impact on environment or society thus, lead to achievement of sustainable success through
reducing amount of pollution and meeting objectives of all stakeholders.
CONCLUSION
From this assignment it can be summarised that management accounting techniques are
very essential for proper presentation of financial data which is very useful for proper decision
making. It makes use of various techniques like cost accounting system, performance and
inventory management system, for proper calculation of cost and price and also helps in
management of stock and other resources. Use of different reports and budget are made for
maintaining records of day to day transactions which helps in forecasting and estimation of
future activities. Marginal and absorption costing are used for preparation of income statement.
At last conclusion can be made that planning tools are very effective in implementing budgetary
control. Techniques of management accounting system like benchmark and variance analysis are
also used for addressing financial problems. Variance analysis provides a comparison between
actual and budgeted data so that inefficiency in performance can be detected on time thus,
facilitates corrective action on time.

REFERENCES
Books & Journals
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Research.
Agrawal, R. K., 2018. Principle of Management Accounting. Educreation Publishing.
Bai, L., Koveos, P. and Liu, M., 2018. Applying an ontology-augmenting XBRL model to
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