The improvements in information and communication technology upon management accounting will be commented on, explained and discussed at length.
There are a lot of areas outside of numbers that need to be looked at, processes and procedures, what the tone of the company is. Accounting will take you in just about any direction in a company.
The job description of many professions is changing nowadays. The skills to perform a certain job require more skills to perform a particular job. In a managerial accounting world all professionals must communicate their ideas to other companies using ways which are tactful and effective.
Management accounting became a prerequisite for more detailed information for stock control, product costing and decisions affecting the future. Cokins G and Hicks D believe that Managerial accounting is part of an organisations management information system.
To follow any business or an organisation aim managers engage in activities which involve an effective cost model as it can be a great asset to an organisation.
A project should be continued within the means provided otherwise stakeholders struggle to finance the project and its abandoned.
A success of a manager is when appropriate tools are employed and sound safe decisions are made and follow on with applying substantial level of expertise to have effective cost management. The world today is surrounded by increasingly advanced technology such as computer assisted manufacturing and flexible manufacturing systems.
According to Cokins and Hicks organizations to compete effectively need to understand the cost of each product or element of their value chain from product design and purchase of material therefore internal cost is very important as mentioned in Cokins and Hicks article because it becomes critical for competitive action and increasing shareholders wealth in the current globally competitive economy.
Management accounting systems are the benefactors of the precarious internal cost information. There has been few criticisms leading to the literature of Management accounting system and it has been labeled outdated and there has been criticisms linked to its consistency as it has been thought that it does not provide consistent information with the current strategic management paradigm.
Cokins and Hicks believe that systems designs elements should capture the fundamental technology, promote a business based on effective cost model, quality and lead time.
In traditional era product line diversity was not very common and cost of materials and direct labour were the main components of production cost but the environment today is surrounded around advanced technology and automation and that has led the prime cost to be the overhead component.
The overhead costs are altering product cost because of the old management accounting system techniques. Management accounting needs a unique set of skills and behaviour. According to Cokins and Hicks Accounting Management framework gives business a planned approach to address all factors that will manage accounts interface and todays reality.
The first one is organizational structure. It includes factors such as whom and how you manage accounts, why and how you organize around them. The second account management success factor is people as they need the appropriate skills, knowledge and skills to experience and perform the role.
The fifth account management success factors are processes and methodologies as they should align with the customer, drive growth and opportunity plan and the last factor channels and alliances must be managed effectively through the account manager interface.
First few deliberate decisions need to be taken in terms of placement of accounts management resources such as market and territory. Cokins and Hicks believe management team need to plan using methodology a number of factors to create a ranking based on the business goal for the affiliation and ability to deliver.
Once these methodologies are selected they can play a vital role in team structure and it will help to deal with issues such as ownership or shareholders Cokins and Hicks discuss the difference between cost accounting and managerial accounting and the strength of their article is that managerial accounting is tied with GAAP whereas cost accounting is used within a business to manage that particular business.
Accounting standards of a country provide guidelines to an accountant so they can be used while reporting economic transactions of a business. United Kingdom accounting has improved a lot as mentioned in the journal being studied for this particular assignment.
Managers have immense pressure to improve financial management practices to improve service to the community and it is not only done on national level. Managerial accountants have to keep accountant standards fair globally and that is mainly done through Accounting Standards Committee.
Any business main task is to develop an active measurement system as it is main part of the management process. Good management practices lead to using certain measures to plan, implement and improve certain aspects of an organization.
According to Kaplan, measurement is a difficult task because it is not related to science so there are no facts and does not have rules between variables. Furthermore, systems which are used by management accountants will make sure that actions are taken according to the strategies and objectives developed.
One of the techniques developed in 80s was strategic management accounting and some of the processes which fall under the category of strategic management accounting are activity based costing and balance scorecard. The balance scorecard emerged after it was realized that there is a need of an integrated system which can be used to measure both financial and non-financial performances.
Therefore, a stereotypical role of an accountant was once considered a “number person” but today’s era demands accounting professional to own and use interactive and communication skills to help with the decision making process across all areas of a business. management accounting and business decision making Essay by zhphappy, University, Bachelor's, B+, January download word file, 8 pages download word file, 8 pages 8 votes 1 reviews4/5(1). Management accounting techniques -- accounting procedures that emphasize current information and analysis for managerial decision-making -- can provide small-business owners with useful.
It helps companies to view their performances on a regular basis and it gave a clear view of what should be measured in order to balance a particular business financial perspectives.
The balance score card consists of four functions known as learning and growth perspective. It means how to achieve a certain organizations goals and how will a business will sustain its ability to change and improve.THE DIFFERENCE BETWEEN MANAGEMENT & FINANCIAL ACCOUNTING: Management accounting is concerned with decision making, cost apportionment, planning and control.
It is based within the organisation and is solely for the use of the managers to conduct their business dealings. The paper will also discuss on the concern towards the financial and management accounting’s linkage and such linkage drawing operating decision making into a short-term, narrow focus not supportive of the most effective operations.
management accounting and business decision making Essay by zhphappy, University, Bachelor's, B+, January download word file, 8 pages download word file, 8 pages 8 votes 1 reviews4/5(1). This is because of the different emphasis: management accounting information is used within an organization, typically for decision-making.
According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management .
The paper will also discuss on the concern towards the financial and management accounting’s linkage and such linkage drawing operating decision making into a short-term, narrow focus not supportive of the most effective operations. Find great deals on eBay for accounting tools for business decision making.
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