Question: This unit states that you are working as a management accounting officer in a business entity named as AnswerLabs. This helps in developing an understanding about different aspects related to accounting.
- Develop understanding of management accounting system.
- Discussion about different types of management accounting techniques.
- Define the use of planning tools.
- Identify different ways in which organisation can respond to their financial problems.
In every sector, management accounting is that which is required to be prepared with the use of statistical data for making an proper decision and strategies in firm by the managing directors and also has to made day to day transaction in better way and also lead to managerial transaction too (Vasile and Man, 2012). Basically, the entity are those who uses the advanced technology in great manner which do help in developing the solutions for revamping in business in effective way too. Split and sort of finance in different department can also have an reduction of wastages in better way as well. The report is based on AnswerLabs, which is a small company and provide fitness training to millions of people.
Report will discuss about, various management accounting system which is required in firm and will also be explained. It is such which will include the several method of management accounting. Basically, report will also talk about advantages and disadvantages of different type of planning tools which is considered as help in budgetary control and it also leads with contribution of accounting system with problems occur in finance department and be solved in proper way.
P1 Management Accounting and its different types
Management Accounting: Management Accounting is such which do help in preparation of the P&L Account, Balance Sheet and Cash Flow Structure Etc. even these all are prepared with the help of different costing method in better way. Therefore, having an proper account can also help in having an proper information and data that can be helped in having an various activities of firm. Basically, all these type of scenario does help Answer Lab to gather information related to their position in market, so that they can produce an better strategies and decision that will be eventually make firm to have an proper working in great way. Moreover, management accounting is such which do provide an information to the entity as sales, inventory, cash and also raw materials as well etc (Albelda, 2011). Even though this kind of scenario does help in having an financial and non-financial data and also needs to convert the day to day task and activities in great manner. Normally, main aspect i.e. management accounting is such which do help in having an revamp position for various thing like performance, budget and having an position in market although they can expand there business activities too in perfect way (Van der Stede, 2011). Hence, it is such which do help in three areas enterprises and they are as:
- Strategic management: It is particular that area which do include the strategy which is required and also leads to have an different factors which is merely associated with different functions in great way. Basically, financial and non-financial data and information is that which also leads to have an preparation of different budget and having an standard for finding out some of the issues that arise out of it.
- Risk management: In this scenario, information and data is such which do mainly help in having an identification of different thing also manages risk in great way and leads as association with the different functions of firm in great way. For instance, inventory management is like which do help in analysing the stock and also help in having continuous resources, and it is be like according to demand and having an level of production too (Arroyo, 2012).
- Performance management: Management Accounting, is also having an information and having an contribution which do help in appraising of performance of employees in better way and even they do also attain the solution in perfect way as well. Basically, it also help in developing the skills and the abilities as well that has different task with there functions too.
Even though, some of those management accounting system that is prepared by the AnswerLab for having an proper working in organization and some of those are as:
Managerial Accounting: Moreover, it is such which do help managers in making decisions that is related to various activities in firm. This generally helps in producing an plan, control also manages some of the major important decisions as well that do make have an revamping with operation department that lastly contribute in the achievement of having an desired outcome too (Vasile and Man, 2012).
Cost accounting system: It is such which does help in controlling the different cost which do occur and incur on performance with the different functions of the firm. Basically, it is such which also lead to determine the profitability, inventory valuation etc. Moreover, they have undertaken different things in great way so that system is such which is being utilised in right context and in better way (Becker, Messner and Schäffer, 2010).
Inventory Accounting: Inventory Accounting, normally leads to have an information related to the inventory side in the firm. Moreover, it can be said that it also help to determine the stock in great way so that demand and needs of customer are also can be satisfied in right manner as well. It does tell company to have information regarding inflow and outflow of raw materials too so that effective production can be there in organization.
Job Costing: Basically, methods of accounting is such which also have an identification of the cost which does incur due to generating jobs in enterprise and even earning huge amount of revenue in an effective way too. Even though, for this there is a requirement of various needs and also looks to have an assign of different jobs and also gather some of the information related to the expenses and revenues of same (Van der Meer-Kooistra and Vosselman, 2012).
Hence, management Accounting can also help firm to have an evaluation of there finance in proper way so that proper working needs to be seen with having an earning of different revenues can be earned by AnswerLab.
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P2 Different Method used for management accounting report
For the organization, there are various method for having an account reporting in different context. Basically it does help in collecting effective information which can be useful for the small company and can convert firm to have an proper working. Different method of reporting is being used by the AnswerLabs in having an preparation of various reports too. Even though a report is such which do include the Budget, Job Cost and Inventory with manufacturing. There is an importance of managerial reporting as it does provide an financial and non-financial data related to different department of company and it does help in monitoring the performances of entity and make top executives of enterprise to make an effective decisions and strategies too.
Here are some of the account reporting methods which is used by the company are as:
Budget report: It is such which tell in having an preparation of budget of firm which do include the expenses which is being incur by earlier years as well. Normally, Budget is that which do help management of AnswerLab in having an execution of the performances for several department of entity too. Generally, various budget are those who also control and manage risk in proper way which also lead to provide an appropriate solution to them even in better way (Vakalfotis, Ballantine and Wall, 2013.). Therefore, it is such which also include different benefits to employees according to the performances. Budget is such which do control the extra expenses which does lead to process of different thing and also lead to have an reduction of the operational cost that convert company to attain the desired goals and objectives in various ways.
Inventory report: It is such which also include the report of having an inventory and also has an production of the AnswerLab firm in effective way. Normally report is such which do help the management of raw material and leads to help in finished goods. Moreover, it is such which also lead to have an preparation of product and it is be according to market demand as well, even though it is such which also has an different resources in effective way in right context. Report is such which do include the wastages of different cost and also overhead cost etc. In inventory system, there are various stocks which can be generated as upper and lower stock and with the company and even though they do have an different techniques which lead to have an proper maintenance of inventory as well (Bennett, Schaltegger and Zvezdov, 2013).
Job costing system: Basically, report is such which is being prepared in by manager of AnswerLab and needs to analyse various expenses that is going to be incur which do have an implementation of project as well. Even though, it also help in having an match of different things and expenses which is having an expected revenue as well. Moreover, some of the thing which is considered as the opportunity regarding to evaluation of profit with project and it is such which will going to be started by the company and needs to be accomplished of there target too. Generally, it is be like that do help in generating the large number of profit in right context. Basically, it is such which do help in contribution of some of the cost and its time of firm as well which do help in reduction of operations and its areas which result into having some worth (Suomala, Lyly-Yrjänäinen and Lukka,2014).
Account receivable report: It is such that needs to be prepared by one of the management accounting officer and needs to maintain there debtors in right context. It is something which is being considered as the effective tool and also can be used by firm and needs to be managed by cash flows in right context. Report is such which do help in determining the issues in great way which will lea