Effective Planning Tools for Managing Accounts - BTEC HNC

This PowerPoint presentation, created for a BTEC HNC in Business, analyzes effective planning tools for managing accounts. It begins with an introduction to various planning tools, including capital, operational, and flexible budgets, and their roles in financial planning. The presentation then explores how management accounting techniques are used to address financial issues, such as poor inventory control and lower sales revenue. Techniques like benchmarking, key performance indicators, and financial governance are discussed, with comparative examples of how Starbucks and IKEA have addressed financial problems. The presentation concludes by emphasizing the importance of planning tools and management accounting in achieving financial stability, referencing relevant literature using the Harvard referencing system.

Title
Effective Planning Tools for Managing
Accounts

Table of content
Introduction
Planning tools
Role of planning tools
Types of financial issues
Techniques of accounting
Comparison
Conclusion
References

Introduction
There are a range of planning tools in order to manage different types of accounts. Eventually
these planning tools provide a framework for doing better planning of various financial
resources. This power point presentation is based on a company which is Continental clothing
limited. Company is located in London, United Kingdom and operates its operations in order
to produce different types of clothing items. The power point presentation covers detailed
information about role of three kinds of planning tools. As well as next part of report is related
to defining the ways in which management accounting is used to solve financial problems.

Planning tools which are used in management
accounting (Part A)
The planning tools play an important role in order to providing a framework for completing different
kinds of tasks and activities. These planning tools are essential for company’s managers to apply into
different kinds of operations and activities. In the context of above Continental clothing limited, their
managers apply some planning tools for better financial planning. Below discussion of these planning
tools is done in such manner:
• Capital budget
• Operational budget
• Flexible budget

Role of planning tools
These planning tools are crucial in the context of financial purpose of companies. In
regards to above mentioned planning tools, the manager of companies become able to
know about variation in actual and estimated outcome of income & expense. Like in
the aspect of above mentioned Continental clothing limited, their managers use
operational budget in order to make proper estimation of need of resources to
complete day to day activities. Along with flexible budget also play a key role in the
aspect of those activities which have nature of fluctuation in a financial year.

Types of financial issues(Part B)
In the management accounting (MA) a range of systems for managing
financial and non-financial data are included. It depends on companies that
how well they are using these systems in order to solve financial problems.
Some key financial issues are mentioned in such manner that are as follows:
• Poor control over inventories and cost
• Lower sales revenue

Techniques of accounting
In order to solve these issues, it is essential for companies’ managers to identify cause or
area which is resulting in bad financial performance. In the below part, ways through
which above mentioned companies solved issues are mentioned in such manner:
• Benchmarking
• Key performance indicator
• Financial governance

Comparison of ways to solve financial issues
Basis Starbucks IKEA
Financial problem This company faced the financial issue of higher cost
of storing the inventories because of poor control
over stored quantity of stock. Due to higher storage
cost, other operations and activities also get affected.
And overall cost of operations and activities raised
over the estimated cost.
They faced monetary problem of lower sales revenues. This
financial issue increased a range of other issues such has
negative cash flow and net profit at the end of financial year.
The proposed cause of this financial issue was ineffective
control over pricing of their products. As a result, their
performance became poor and they failed to beat their
competitors on that time.
Technique to
identify issue
Company used benchmarking method in order to find
out cause of issue. They compared their actual
financial performance with other company.
They implemented key performance indicator method in order
to find out those aspects which are leading to financial issue in
the company.
Management
accounting system
to solve the issue
The manager of company used “inventory
management system” with an aim of solving their
problem of higher cost of storage. This is so because
under it, different kinds of techniques are used such
as last in first out, first in first out method etc. After
implying this method, company’s managers became
able to know about how much quantity of products
are available in warehouse which resulted as accurate
decision for purchasing of new material. Hence, their
issue has been solved by this approach.
This company’s manager has applied “Price optimization
system.” Under this accounting system prices of products are
set at a level on which customers can satisfy and can motivate
to buy products. After implementation of this accounting
system, company’s manager revised prices of furniture
products and customer started to buy products at new price
range. Thus, their issue of lower sales revenue has been solved
by help of this accounting system.

Conclusion
On the basis of above presentation slides this can be concluded that planning tools are essential
for companies in order to tackle different kinds of operations. The presentation concludes about
three main planning tools which are operational budget, capital budget and flexible budget. Each
of the budget contributes in regards to better planning of financial resources so that proper
utilization of resources can become possible. The further slides of PPT articulates about
importance of management accounting techniques and approaches in order to overcome financial
issues in an effective manner. For better understanding two companies IKEA and Starbucks have
been used as an example.

References
Das, S.C., 2019. Management control systems: Principles and practices. PHI
Learning Pvt. Ltd..
Ramoutar, P., 2019. Predictive modelling of the factors impacting on
budgetary control in institutions of higher learning.
Isoni, A., 2019. No representation without taxation. For a history of
budgetary control in the European Union. In Features and Challenges of the
EU Budget. Edward Elgar Publishing.