Management accounting is a clear system
Management accounting is a process forwhich is identified, measured, as well as providing all the necessary information that reveals the essence of the company's economic and financial activities. Knowledge of the indicators of the company's operational processes contained in the relevant reports is a necessary link involved in planning, administrative procedures and evaluation of the firm's performance. Management accounting is also a prerequisite for solving the problem of rational use of all resources and completeness of their accounting.
The administrative functions of the organization includeyourself several stages. After setting goals, planning is carried out. Then follows the fulfillment of the assigned task and the control over its solution. Further, the analysis of the work is carried out and the administrative impact is formed. As a result of this cycle, a picture of the situation in the company is formed.
Efficiency of acceptance by the headstrategic and operational decisions is directly dependent on the completeness and quality of the information provided to it. That is, management accounting is a whole system whose purpose is to support the conduct of business on the basis of an analysis of indicators of economic and financial activity.
Reporting to the head servesto create an objective picture of the availability of resources and their effective use. This information is necessary to achieve the company's goals. In this regard, the correct organization of management accounting is the most important task. It stands in front of any enterprise. The first step in preparing the necessary reporting is to reflect the basic operations. They are entered in certain registers. This is called operational or primary accounting.
For the adoption of administrative decisionsthe head must see the company not only as a single link. It is important to objectively evaluate the effectiveness of each unit, as well as the degree of rational use of available resources. It is also necessary to find out the needs of customers and suppliers' proposals. Any situation should be provided in different angles and have a sufficient degree of detail or generalization.
The upper level of the management accounting systemincludes generalized indicators of financial activity. These registers serve for setting the main tasks and indicating common guidelines for successful commercial activity.
The following levels of information providethe ability to determine the causes and analysis of indicators that are generalized. These registers serve to provide information of a more detailed nature on the magnitude of interest with the help of deployed data. On their basis, it is possible to conduct an analysis of the causes of the existing deviations from the normative index. The information of these levels is provided on the basis of operational requests of the management or according to a pre-set schedule.
Management accounting is a clear system,the construction of which is based on one basic principle. It includes setting the task to accountability, which should support the timely adoption of an administrative decision and be oriented towards the achievement of the upcoming goals.
Managerial accounting is designed to:
- to measure the results of the current work of the organization;
- Ensure the clarity and clarity of the strategic objectives;
- focus on critical indicators and key points;
- give a clear picture of the improvement or deterioration of all indicators of the enterprise;
- be the basis for motivating the team.
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