In every field, management accounting is defined as a process of preparing financial information with statistical data for the managing directors which do help them in doing proper day to day transaction in right context and thus also lead to have an managerial transaction too. Even though management accountant are those who will not only relate with financial information for strategy which will lead to success too (Albelda, 2011). Basically, firms are also using advanced technology which direct to develop the proper solution so that improvement in business can be there in effective way. Dividing accurate finance to eve ry department can help to reduce wastage of resources. The report is based on Zylla company, it is a multinational organization which deals in diversified product and having its business in many countries too.
In this report, different management accounting system and its requirement in firm will be explained. It will also include different method of management accounting. Moreover advantage and disadvantage of different type of planning tools are considered as that help in budgetary control and also help in having an contribution of accounting system with financial problem be solves in effective manner.
P1 Management Accounting and its different requirement
Management accounting: Management accounting is that which help in preparing a proper P&L account, Balance sheet etc. with the help of different costing method. Moreover, preparing these accounts can help in gaining an accurate information and data which can help in various activities of the firm. Even though, this kind of criteria can help Zylla to know at which position they are in market and making better strategies which will eventually help them to revamp their working and functions (Arroyo, 2012). Basically, management accounting is that which provide different information to firm like sales, inventory, cash, raw material etc. Therefore, this concept does also provide information about several financial and non-financial data, which manipulate to use it for day to day task and activities. The main aspect of management accounting is to bring some improvement in business is be like on performance, budget, position in market and it can also expand business activities too. This can also help in three areas of business and they are as;
Strategic management: It is that area which includes preparing of proper strategy as per requirement considering various factors associated with their different functions as well. Generally, financial and non-financial information is such which do help in preparing budget and has a standard for finding out issues arising from it.
Risk management: In this area, information and data is that which mainly help in identifying measuring and managing the risk in better way which are also associated with various functions of firm (Becker, Messner and Schäffer, 2010). For instance, inventory management is such which determine different stock that help in continuous resources according to demand and the level of production department too.
Performance management: Management Accounting is such which use information in making a contribution that appraise performance of employees in right context and thus provide appropriate solution to such as well. Moreover, this also help in developing the skill and ability for performing various task and their functions too.
Hence, some of the management accounting system which are prepared in Zylla firm and they are as:
Managerial accounting: It is that which can help managers to make a decision related to various activities in company. This is that concept which can make entity to plan, control, manage and also take some important decisions that can help in having an improvement with operation and also contribute in somewhere achievement as well of desired result.
Cost accounting system: It is that system which do control the cost that also incur on performance of different function on firm. Even though it is such which determine the cost of determining the profitability, inventory valuation etc. It has to be undertaken in better manner so that this system can be utilised in right context.
Inventory Accounting: Management accounting also help Zylla company to have information regarding there inventory in firm. It is that which somewhere also determine stock that is there in inventory so that demand and needs of customer can be satisfied in better way (Bennett, Schaltegger and Zvezdov, 2013).
Job costing: This method of accounting is that which identify the cost which incur due to generating the jobs from which revenue can be earned in effective way. For this, there are various needs to assign the different jobs and to gather information related to expenses and revenues of same too.
Hence, management accounting can help company to evaluate there finance in right direction so that effective working can be seen and with same the earning of revenues and income can be attained by Zylla.