Management Accounting
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Training on Management Accounting Life Business Project Pvt.Ltd. Delhi
Preapered By:Vijay Pratap Singh ERP Consultent
Purpose of Training
➢
➢
To Provide an Overview of the Financial Accounting. To Describe the functionality of financial Accouning with Software Outsourcingand Offsourcing
What is Management Accounting?
It is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating information that managers use to fulfill organizational objectives.
What is Financial Accounting?
It refers to accounting information developed for the use of external parties such as stockholders, suppliers, banks, and government regulatory agencies.
Users of Accounting Information ➢
Internal managers
➢
External parties
➢
Investors
➢
Government authorities
Why We uses Management Accounting Information use information for short-term planning and controlling routine operations. ➢
use information for making nonroutine decisions and formulating overall policies and long-range plans. ➢
use information for making decisions about the company. ➢
Management Accounting is Uses For Scorekeeping is the accumulation and classification of data. Attention directing involves reporting and interpreting information. Problem solving quantifies the likely results of possible courses of action.
What isManagement Accounting Systems An accounting system is a formal mechanism for gathering, organizing, and communicating information about an organization’s activities. ➢
Generally accepted accounting principles (GAAP) include broad guidelines and detailed rules and procedures that make up accepted accounting practices at a given time.
Ovjectives of Management Accounting ➢
Explain the cost-benefit and behavioral issues involved in
➢
designing an accounting system. ➢
Explain the role of budgets and performance reports ➢
➢
➢
in planning and control.
Discuss the role accountants play in the company’s value chain functions.
Contrast the functions of controllers and treasurers.
➢
Identify current trends in management accounting. ➢
➢
Explain a management accountant’s ethical responsibilities.
Understand how managerial accounting is used incompanies.
Explain the cost-benefit and behavioral issues involved in designing an accounting system.
Accounting System Costs and Benefits ➢
The accounting system’s effect on the behavior (decisions) of managers should be considered. ➢ If the system fails to provide information that is timely or in a useful format, there will be a lack of acceptance by users.
Explain the role of budgets and performance reports in planning and control.
Planning and Controlling What is decision making? It is the purposeful choice from among a set of alternative courses of action designed to achieve some objective. This is the core of the management process.
Planning and Controlling
Corrections and Revisions of Plans and Actions
The Management Process
Internal Accounting System
Planning •Increase
Budgets, Special Reports
Productivity
Financial Accounting System
Controlling •Actions •Evaluations
Performance Reports
Customer surveys Competitor analysis Advertising impact New items report
Role of Budgets
A budget is a quantitative expression of a plan of action and is an aid to coordinating and implementing the plan. Budgets are the chief devices for compelling and disciplining management planning.
Role of Performance Reports Performance reports formalize controls and provide feedback by comparing results with plans and by highlighting variances. Variances are deviations from the plan.
Performance Report Budgeted Actual Variance Amount Amount Amount Revenues 25,000 19,000 6,000 U Expenses 20,000 15,000 5,000 F Net Income 5,000 4,000 1,000 U ➢ F =Favorable ➢ U =Unfavorable
Product Life Cycle Product Developmen t
Introduction to Market
Mature Market
Product Phase-out
Discuss the role accountants play in the company’s value chain functions.
How MGT Accountingplay in the company’s value chain functions. Research and Developmen t
Marketing
Design
Production
Distribution
Customer Service
Value Chain Functions 1-Research and development:is the generation of, and experimentation with, ideas related to new products, services, or processes. 2-Design:is the detail and engineering of products. 3-Production:is the coordination and assembly of resources to produce a product or deliver a service.
Value Chain Functions 4-Marketing:is the manner by which individuals or groups learn about the value and feature of products or services. 5-Distribution:is the mechanism by which products or services are delivered to the customer.
Value Chain Functions
5-Customer service:is the support activities provided to the customer.
Contrast the functions of controllers and treasurers.
Authority and Responsibility Line authorityis granted to managers who supervise subordinates and are accountable for assets and operations. Staff authorityis the authority to advise and support management personnel.
Organization Chart Controller
General Accounting
Internal Audit
Taxes
Functions of the Controller Planning for control ➢ Reporting and interpreting ➢ Evaluating and consulting ➢ Tax administration ➢ Government reporting ➢ Protection of assets ➢ Economic appraisal ➢
Functions of the Treasurer Provision of capital ➢ Investor relations ➢ Short-term financing ➢ Banking and custody ➢ Credits and collections ➢ Investments ➢ Risk management (insurance) ➢
Identify current trends in management accounting.
Current Management Accounting Trends
➢
Factors causing changes in management accounting: ➢Shift from a manufacturing-based ➢to a service-based economy ➢Increased global competition ➢Advances in technology
Just-in-Time (JIT)
Eliminate waste by reducing the time products spend in the production process. ➢
➢
Eliminate the time products spend inactivities that do not add value.
Explain a management accountant’s ethical responsibilities.
Standards of Ethical Conduct Management accountants have an obligation to the organizations they serve with the following standards: Competence
Confidential ity
Integrity
Objectivity
Understand how managerial accounting is used in companies.
Vital Role of Accounting Information ➢
➢
Management accounting plays a vital role in the achievement of company goals and objectives. Management accounting information is used across the entire value chain of activities as well as throughout the life cycle of products and services.
Thanks
Preapered By:Vijay Pratap Singh ERP Consultent
Purpose of Training
➢
➢
To Provide an Overview of the Financial Accounting. To Describe the functionality of financial Accouning with Software Outsourcingand Offsourcing
What is Management Accounting?
It is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating information that managers use to fulfill organizational objectives.
What is Financial Accounting?
It refers to accounting information developed for the use of external parties such as stockholders, suppliers, banks, and government regulatory agencies.
Users of Accounting Information ➢
Internal managers
➢
External parties
➢
Investors
➢
Government authorities
Why We uses Management Accounting Information use information for short-term planning and controlling routine operations. ➢
use information for making nonroutine decisions and formulating overall policies and long-range plans. ➢
use information for making decisions about the company. ➢
Management Accounting is Uses For Scorekeeping is the accumulation and classification of data. Attention directing involves reporting and interpreting information. Problem solving quantifies the likely results of possible courses of action.
What isManagement Accounting Systems An accounting system is a formal mechanism for gathering, organizing, and communicating information about an organization’s activities. ➢
Generally accepted accounting principles (GAAP) include broad guidelines and detailed rules and procedures that make up accepted accounting practices at a given time.
Ovjectives of Management Accounting ➢
Explain the cost-benefit and behavioral issues involved in
➢
designing an accounting system. ➢
Explain the role of budgets and performance reports ➢
➢
➢
in planning and control.
Discuss the role accountants play in the company’s value chain functions.
Contrast the functions of controllers and treasurers.
➢
Identify current trends in management accounting. ➢
➢
Explain a management accountant’s ethical responsibilities.
Understand how managerial accounting is used incompanies.
Explain the cost-benefit and behavioral issues involved in designing an accounting system.
Accounting System Costs and Benefits ➢
The accounting system’s effect on the behavior (decisions) of managers should be considered. ➢ If the system fails to provide information that is timely or in a useful format, there will be a lack of acceptance by users.
Explain the role of budgets and performance reports in planning and control.
Planning and Controlling What is decision making? It is the purposeful choice from among a set of alternative courses of action designed to achieve some objective. This is the core of the management process.
Planning and Controlling
Corrections and Revisions of Plans and Actions
The Management Process
Internal Accounting System
Planning •Increase
Budgets, Special Reports
Productivity
Financial Accounting System
Controlling •Actions •Evaluations
Performance Reports
Customer surveys Competitor analysis Advertising impact New items report
Role of Budgets
A budget is a quantitative expression of a plan of action and is an aid to coordinating and implementing the plan. Budgets are the chief devices for compelling and disciplining management planning.
Role of Performance Reports Performance reports formalize controls and provide feedback by comparing results with plans and by highlighting variances. Variances are deviations from the plan.
Performance Report Budgeted Actual Variance Amount Amount Amount Revenues 25,000 19,000 6,000 U Expenses 20,000 15,000 5,000 F Net Income 5,000 4,000 1,000 U ➢ F =Favorable ➢ U =Unfavorable
Product Life Cycle Product Developmen t
Introduction to Market
Mature Market
Product Phase-out
Discuss the role accountants play in the company’s value chain functions.
How MGT Accountingplay in the company’s value chain functions. Research and Developmen t
Marketing
Design
Production
Distribution
Customer Service
Value Chain Functions 1-Research and development:is the generation of, and experimentation with, ideas related to new products, services, or processes. 2-Design:is the detail and engineering of products. 3-Production:is the coordination and assembly of resources to produce a product or deliver a service.
Value Chain Functions 4-Marketing:is the manner by which individuals or groups learn about the value and feature of products or services. 5-Distribution:is the mechanism by which products or services are delivered to the customer.
Value Chain Functions
5-Customer service:is the support activities provided to the customer.
Contrast the functions of controllers and treasurers.
Authority and Responsibility Line authorityis granted to managers who supervise subordinates and are accountable for assets and operations. Staff authorityis the authority to advise and support management personnel.
Organization Chart Controller
General Accounting
Internal Audit
Taxes
Functions of the Controller Planning for control ➢ Reporting and interpreting ➢ Evaluating and consulting ➢ Tax administration ➢ Government reporting ➢ Protection of assets ➢ Economic appraisal ➢
Functions of the Treasurer Provision of capital ➢ Investor relations ➢ Short-term financing ➢ Banking and custody ➢ Credits and collections ➢ Investments ➢ Risk management (insurance) ➢
Identify current trends in management accounting.
Current Management Accounting Trends
➢
Factors causing changes in management accounting: ➢Shift from a manufacturing-based ➢to a service-based economy ➢Increased global competition ➢Advances in technology
Just-in-Time (JIT)
Eliminate waste by reducing the time products spend in the production process. ➢
➢
Eliminate the time products spend inactivities that do not add value.
Explain a management accountant’s ethical responsibilities.
Standards of Ethical Conduct Management accountants have an obligation to the organizations they serve with the following standards: Competence
Confidential ity
Integrity
Objectivity
Understand how managerial accounting is used in companies.
Vital Role of Accounting Information ➢
➢
Management accounting plays a vital role in the achievement of company goals and objectives. Management accounting information is used across the entire value chain of activities as well as throughout the life cycle of products and services.
Thanks
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