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.

FAREED SIDDIQUI

I am an Individual Member of Institute of Management Consultants of India. I am a Professional with a high creative capability based on Business, Management, Financial Accounting, Management Accounting, Finance and Management Consulting Field. I impart part time training and development programs. I write professional articles on business & management, business English and Software Engineering.

Related Articles

0

1.54K

Salient Features Of Management

This article is intended to provide some salient features of management. It also stresses the importance of Management in business organizations..

0

143

Employee Record Keeping – The Need And Importance Of

Effective system of maintaining employee records has its own value and importance in business organizations. It helps a business management in various ways.

0

189

Brief Explanation Of The Concept Of Capitalism

The term capitalism is commonly known in the business and industry sector of the country. It is defined as an economic system or model to which majority of the commerce, trade and businesses in a particular country are being owned by private individuals or businessmen.