Management Accounting Systems and Reports: Prime Furniture, UK

This report provides a comprehensive overview of management accounting, defining its core concepts and contrasting it with financial accounting. It explores various management accounting systems, including inventory management, job costing, and price optimization, and their application within a business context. The report uses Prime Furniture, a UK-based furniture provider, as a case study to illustrate the practical implementation of these systems. It delves into the different types of managerial reports, such as accounts receivable, inventory management, budget, and performance reports, explaining their purpose and how they contribute to effective decision-making. The conclusion highlights the significance of management accounting in cost management, risk control, and performance enhancement, emphasizing the role of these systems and reports in achieving organizational goals. The report is supported by references to academic literature.

Management accounting

• INTRODUCTION
Management accounting can be define as border term
which is used by every business corporations to improve the
productively and operations of business activities.
This strategy is used for taking effective decision.
Management accounting is essential branch of the
accounting in which records are formulate maintain and
presented in a way which help in formulating policies and
strategies in order to achieved growth of business
organization.
In this presentation Prime Furniture has been taken which is
situated in England and provides furniture facilitates to their
customers.
This restarts includes the maintaining, of management
accounting and use of its system and reports of management
accounting in order to attain the goals of business
organization by taking effective decision.

P 1 Discrimination of meaning of managing accounting and
requirement of managing accounting system
TASK 1
Management accounting : It is essential part of the accounting system,
which is developed to use by internal department of business
organizations through which they are able to effective present their
organization data specially financial information in effective way.
Management accounting refers as the procedure in which records
are maintain and represents in effective way which use for
decision making process
Principles and role of management accounting: Manager of the
business organization apply managing accounting on the basis of
several principles. Management accounting is used for cover up all
the sectors of business(Mancini,and Ferruzzi, 2016).
It is designs a s to provide essential information for mangers
to run their business operation in effected way.

. They provides and collect information by using tools and techniques
which includes, tread analysis, sales forecasting, product , job
costing and constraint analysis. This system is used and have
important role in each stage of the Prime Furniture.
It will useful in preparing and planning of r policies and plans
and Prime Furniture mangers use it for performance evaluating
and for identifying deviation between business activities and
standard or budgeted activities.
Management accounting used to cover up all the direct by
using principles of effect communication, providing reliable
and valuable information and building trust among all the
department to organization (Alinejad, Emamgholizadeh,
SZabihi,and Alizadeh, R2015).

It will useful in preparing and planning of r policies and plans
and Prime Furniture mangers use it for performance evaluating
and for identifying deviation between business activities and
standard or budgeted activities.
Management accounting used to cover up all the dircent by
using principles of effect communication, providing reliable
and valuable information and building trust among all the
department o te organization.

Differences between financial and management
accounting
Financial and management accounting both are the parts of
accounting branch but they have some differences
Financial accounting Management accounting
This branch of accounting is provides information
regarding only for financial transactions of
business organization.
It is used to representing accounting information
of decision making process. This includes
financial And non financial transactions.
Preparation of financial statements is essential for
every business entities.
It is not mandatory of business entities to prepare
management accounting statement and used its
tools and techniques with the business.
Financial accounting is useful for external parties
of business entities.
Managing accounting is useful for internal
department of business entities

Different types of managing accounting system:
All the business organizations use different types of managing
accounting system in order to recognize the affect of the systems.
In assists to the prime furniture following types of system can be
useful for enhancing growth to the business organization
Inventory management system: This system is related with
maintain records of the stock. It will useful in optimum utilization
of resource by maintaining systematic records. Prime furniture
used LIFO, FIFO, average method of recognizing stocks though
which they can able to distribute their goods.
They use EOQ , ABC analysis technique it will help in
analysing the maximum, minimum level of the stock and help
in formulating report.
Job costing system: With the use of job costing system, mangers
will be able to recognize the cost change of manufacturing of each
product.

This method is useful for those organizations which manufacture
their products on the basis of demand of their clients. Especially
sports car and building manufacture organizations.
Prime Furniture provides furniture to their clients thus this system
helps them to evaluate cost of producing furniture.
Price optimization system: This system is developed for
determine price of products and service of the organization.
Various types of pricing mechanism strategies are available for the
organization through which managers can adopt the set pricing
strategies to achieve their goal and enhancing sales value.
They can use pricing skimming, discrimination, price penetration
strategies in order to decided price of the product. Pricing system
help in attain profits for the organization.

P2 methods used for managerial accounting reports
Reports are prepared to provide information regarding the
performance and future activities of the business organization.
Managerial reports are formulated for communicate relive
information among internal department.
Account receivable report: This report has been prepared in order
to record the transaction related to each debtors of the organization.
Prime Furniture use this report in order to identify nonperforming
debtors (Norvell, T. and Horky, A., 2017).
This report useful for important policies through which mangers
can recover amount from doubtful debtors and increase cash
sales in order to enhance their cash flow.

Inventory management report: This report is formulated to
represent the statement which show overall stock of the business
organization.
With the implementation of inventory report manager of Prime
Furniture will be able to analyse the cost of maintaining their
stock, time duration required to fulfils operating stock cycle and
cost of this raw materials which required higher cost.
Budget report: It is the combination of all the reports of managerial
accounting. This report is formulated to analysis the future income
and expenditure of the business operations earn by business
organization.
Manager of Prime Furniture will be able to determine the future
cash outflows and activities of inflow. This provides base to
formulate policies of business.

Performance report: This report is useful for those organizations
which provide higher incentive on the basis of work performance of
the employers.
Performance report is prepared in order to determine the states of
performance of each department of the organization.
Manager of Prime Furniture use those preparation to analysis their
weak and strong capable workers it will help in recognized those
employers who need training to enhance their skills (Mancini and
Ferruzzi, 2016)/
On the basis of performance report manger distributes
incentive and give promotion which will help in increasing
motivation of the employers.

CONCLUSION
From the overall report it has been concluded that management
accounting is a part of accounting which help in decision making
process for the managers.
By the uses of effective management accounting system and various
reports of managerial accounting, mangers of business corporation
able to identify cost of each business activities, managing risk
controlling the cost of wastage activities and enhancing
performance of the employers by providing them incentive with the
use of performance managerial accounting reports .

REFRENCES
Mancini, D. and Ferruzzi, C., 2016. Using collaboration platforms for
management control processes: new opportunities for integration.
In Empowering Organizations (pp. 91-101). Springer, Cham.
Alinejad, G., Emamgholizadeh, S., Zabihi, A. and Alizadeh, R., 2015.
Enterprise Resource Planning System Selection Methodologies in
Electronic and Mobile Commerce. Journal of Green Science and
Technology, 2(1), pp.62-66.
Mancini, D. and Ferruzzi, C., 2016. Using collaboration platforms for
management control processes: new opportunities for integration.
In Empowering Organizations (pp. 91-101). Springer, Cham.
Norvell, T. and Horky, A., 2017. Gift card program incrementality and
cannibalization: The effect on revenue and profit. Journal of Retailing
and Consumer Services, 39, pp.250-257.