How management accounting is helpful in management functions?
Image Source - https://pixabay.com/photo-2899885/
Management Accounting - How it helps in Management Functions
- Category :Accounting
Management accounting is primarily concerned with management needs. It helps management significantly in executing its related functions effectively and efficiently. The basic functions of a management are: Planning, Organizing, Coordinating, Motivating, Controlling and Communicating. Let's discuss how management accounting helps in these functions of management.
Management accounting is primarily concerned with management needs. It helps management significantly in executing its related functions effectively and efficiently. The basic functions of a management are: Planning, Organizing, Coordinating, Motivating, Controlling and Communicating. Let's discuss how management accounting helps in these functions of management.
Planning: Management is deeply concerned with planning process, as effective planning leads a business to reap desired results. By means of planning, a business management can identify where it stands and what it takes to grow and develop in a way as has been predetermined. Management accounting makes a valuable contribution in planning process of a business management by providing significant and relevant data, such as, budgetary controls, cash and profit and loss forecasts etc.
Organizing: Management accounting plays a vital role in the organizing function.
The process involves the entire organization splitting in into various profits and cost centers in order to determine the results thereof, while it facilitates in controlling measures for various cost centers.
Coordinating: Management accounting seeks to achieve effective coordination between various departments. Focusing on the need of department budgets and reports, it provides necessary information that facilitates management in serving various purposes.
Motivating: The process of motivation reinforces an action. In this way, management accounting seeks to motivate the concerned employees of various departments toward the accomplishment of desired objectives, while allowing each and every employee to contribute in common goals of business. It involves preparing periodic profit and loss accounts, budgets and other necessary reports.
Controlling: As regards controlling, so far as the budgets are useful in facilitating the planning process of a business, budgetary control is a good means of controlling as well. Other techniques, such as, standard costing and departmental operating statements are of great help in making controlling measures. They are also helpful to take remedial measures in case of deviations in the performance of business entity.
Communicating: It is through this process that the results are communicated to the owners, superiors and subordinates. It also includes transmitting data highlighting necessary information, such as, progress of business, financial position to the required users.
Related Articles
Microeconomics Vs Macroeconomics - Which One Is Import
Microeconomics and macroeconomics constitute the fundamental divisions of economics, each addressing different tiers of economic operations. While certain principles are shared, they center on discrete levels of examination, leading to diverse consequences for decision-making and policy formulation..
Debt As One Of The Main Causes Of The Great Depression
Speculation in financial assets and transactions is always a game full of risk. The reason why financial analysts who ought to know this better than us, still indulge in such risky games, is because of the asymmetry in profits and loss sharing.
Strategic Management - Merits Of Strategic Management
Strategic management is a vitally important accompaniment to a business that maintains the efficiency and effectiveness in overall performance while ascertaining long term goals. It's also meant for creating value for customers, as well as shareholders.