The needs of it vary for different organization in accordance to business areas of their concerns. Its needs include:
As stated, preparing management account periodically is recommended but not mandatory. But, for the sake of business it is needed to maintain once in a month or quarterly in a year depending upon company profile and size. It is very hard to run a business efficiently without them.
In this era of information, information system is not getting utilized as it was expected. In management account information needs to be applied properly and adequately. The best way is to break down so that the performance of different elements of the business can be measured. For example, for one integrated Circuit manufacturing company, different flows can be broken up and later on aggregated. Flows may include mask design, photolithography, oxidation and etching etc. Or, if a manufacturing industry has various processes such as, molding, embossing or welding then they can be segmented as per their sequence and finally need to be mapped together. If any financial institution is taken under consideration then, it might have more than one sales outlet and for this case separate report for each outlet is required.
Management account specifically analyzes performances and includes sales, cash-flow and profit forecast which are treated as forward looking elements. The analysis generally is carried out against forecast and budget that has been brought down during initial period of the year.
Information System and Its Usage
According to Jung et al (2004), information is a key corporate resource that can be adopted for automation in accounting management other than its normal application in effective project management. They developed a methodology that can be applied for appraising informatization in construction industry. Informatization is a process of minimizing cultural and economic barriers by information and communication technology after proper transforming its economic and social relationships (Kluver, 2000). In other words, it is the percentage of workflow that IT supports mostly classified into technology substitution, process enhancement and transformation of organization and strategy (Hannah et al., 1995). If Kluver (2000) described the idea of informatization from social and economic point of view then, on the other side, Hannah et al. (1995) mostly concentrated on organizational concerns.
Land (2004) defined information systems as "systems whose ultimate purpose is to store and manage information (as opposed to e.g. control systems, which are designed to control physical processes, and manages information only as a means to achieve this." It is a long lived process and hence, must incorporate the changing requirement making it a robust. Information systems face different problems such as updating of documents and the integration of different systems.
Information systems in industry have not been used sufficiently in this era of information technology. The importance of information systems relies on its capabilities of making business processes run more efficiently. Computer has brought our mind into such a platform that departments in any given