Management Accounting
Training
on
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
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 authoritiesWhy 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
What isManagement
Accounting Systems
➢An accounting system is a formal mechanism forgathering, 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
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
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
Explain the role of budgets
and performance reports
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
The Management Process Internal Accounting System Planning •Increase Productivity Controlling •Actions •Evaluations C or re ct io n s an d R ev is io n s of P la n s an d A ct io n s Budgets, Special Reports Financial Accounting System 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=UnfavorableProduct Life Cycle
Product Developmen t Introduction to Market Mature Market Product Phase-outDiscuss 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 Design Production
Marketing Distribution Customer
Value Chain Functions
1-Research and
is the generation of, and
experimentation with, ideas related to new products, services, or processes.
is the detail and engineering of products.
is the coordination and assembly of resources to
Value Chain Functions
is the manner by which individuals or groups
learn about the value and feature of products or services.
is the mechanism by which
products or services are delivered to the customer.
Value Chain Functions
5-Customer
is the support activities provided to the customer.
Contrast the functions of
controllers and treasurers.
Authority and
Responsibility
Lineis granted to managers who
supervise subordinates and are accountable for assets and operations.
Staff
is the authority to advise and
support management personnel.
Organization Chart
Controller General Accounting Internal Audit TaxesFunctions 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
Identify current trends
in management
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
Standards of Ethical
Conduct
Management accountants have an obligation to the
organizations they serve with the following standards: Competence Confidentiality
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
