Electronic Boards plc OVERVIEW Management accounting system is a mechanism that accounts for the entire conduct of a firm and counts for the contribution of each jobs’ share in revenue and expenses, irrespective of its level of contribution. Management accounting system provides insight about the business in the present and also helps in determining future prospects of the company with forecasting tools…
Current Situation Electronic Boards plc is electrical engineering company and it has been in the business since 1970’s. Company has almost 200 employees and it has been profitable over the last several years. Since establishment to 1985 company has been conducting operations without maintaining true accountancy systems. However, financial crisis has hit the company and it recorded a loss of ?1.7 million. This loss also had an impact the liquidity position of the company. The company’s management director Jack Watson has recently decided to develop the management accounting system for the firm to keep the track record of entire operations and to make sure that the company is able to understand how different products are performing. This report will analyze and outline the main factors that the company needs to consider in establishing a useful management accounting function within the company. ...
Investing In Different Projects It has been found that the company directly purchases new technology or equipment in order to improve the productivity without analyzing the cost and benefit ratio of the investment. Therefore after establishing accounting system, the management would be able to make decisions by analyzing the cost and return of the investment and thus it can be helpful in increasing the profitability as only profitable investment will be accepted and others will be rejected (Jaffe, 2007). Moreover, it will be helpful in reducing the interest charges and high bank charges as the company will not be investing in every other technology that comes up. Identifying Areas Of Improvements As the company will have proper management accounting system, so with this the company will be able to identify areas where it can reduce costs and thus it can be helpful in increasing profitability. CONCLUSION Management accountings system, once developed, will provide more insight about the current status of business and would enhance its capacity to ability to develop and enhance its capacity to compete and forecast its future needs. Moreover, the company would be able to improve its profitability and at the same time manage situations like recession in a better way. References Jaffe, J. (2007). Corporate Finance, Pashupati Printers Pvt Ltd: Delhi. Keown, A., Martin, J., & Petty, J. (2011). Foundations of finance (7th ed.). Boston, MA: Prentice Hall. Johnson, G., & Scholes, K. (2001). Exploring Corporate Strategy: Text and Cases. 6edition, Prentice-Hall: ...
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“Strategic Management Accounting Essay Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.net/other/12343-strategic-management-accounting.
Management accounting is considered to be useful when it properly displays an external image and a futuristic picture for an organisation. Strategic Management Accounting on the other hand can be distinguished from other management accounting activities through its extensive external orientation; this extensive external orientation includes focus towards customers, competitors, suppliers and all other stakeholders that get affected by the organisation’s normal course of business.
In above connection, strategic management accounting presents numerous benefits in organization decision making. Some of its benefits include; helps in analysis of variances, monitoring and control, financial reporting, controlling cost among other benefits (Codjia, 2013).
According to the author, management accounting has failed in the application of qualitative features of management as well as the strategic thinking in management. As a result of the failure of management accounting, strategic management has been introduced in the profession of accounting hoping it will be effective in areas of management.
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The two types of financial management differs in the sense that financial management can only provide the company a glimpse of where it is standing right now in terms of financial soundness. While strategic management enables a company to go beyond the boundaries of the normal financial management.
The project report then looks at the aims and objectives of establishing a management accounting system and the characteristics of information flow at the strategic level. It also analyse the effectiveness of SMA system in the provision of information to assist the senior management team in the achievement of the corporate objectives at Highline.
Further, the strategic decision-making issues related to the different factors like competitive pricing of products or services, the operational strategies of the business, the manufacture and development of products and the product costing are discussed in detail.
The United States Postal Service is a self-governing institution under the federal government of the United States which is responsible for procuring postal services in United States (Wyatt, 2003). As on 2014, it has become
trategic management accounting which leads to evaluate an organization’s interaction between its product market and capital market, analyze the internal architecture of the company and its cost considerations so that it can be evaluated whether it is required to bring any
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