The Pros And Cons Of Managerial Accounting

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In the world of business, managerial accounting plays a major role to control a business in an effective method. The management accountants of an organization focuses on the forecasting and decision making of that business. The accountants also help to make business planning, reviewing and analyzing the performance of the business. As an consulting management accountant, the report try to focus on the issues like cost controlling, quality control of the products, reviewing the efficiency of the budget and the in-depth cost that is followed by the business. The report not only try to identifies the problem but also consults the business how to get rid of the problems by using product costing methods and how to acievev an effective and efficient…show more content…
As a consulting management accountant, a financial accounting report provides information for outside like information for shareholders and investors but a management accounting report provides information for the people inside the organization. A management accounting report focuses on the entire organizations. The managerial accounting reports are used mainly within the organizations. These reports can be published for any period of time. It can be weekly, monthly or even daily. The values within the report are generally forecasted. As mentioned before financial accounting information is mainly for the outside people of the company. It is published once in a year and consists of factual and predicted values for those who are interested in investments. The management accounting information are used for further decision making like the report of sales forecasting, budget analysis and comparative analysis, feasibility studies and reports for merger and consolidation. Information in managerial accounting reports are future-oriented and the information is provided to the top management whereas information in the financial reports are historical informations which does not help the internal organizations which does not help the internal organization much. Managerial accounting information may effect the behavior of employees but still it helps a company to give…show more content…
The method is used for decision making and planning in the organization and used by the managers of the organizations. Organization uses this method to have accurate costing allocation in the production. It helps to have an accurate value of cost and profitability of each products and services. This methods help to convert indirect costs into direct costs which helps to achieve an accurate costs. The method helps to support decisions related to pricing, removing or adding items from the product protfolio and implementing evaluating processes for improvemnets in the organiation. Since these method gives us accurate information about costs it helps us to take more accurate pricing decisions. The method also helps to increase the understanding of overheads and cost drivers and focuses on the non-added values which were ignored by the traditional costing approach which helps the manager to understand what to add and what to eliminate. The method helps to use effective operating costs which can be used in better allocation. It also enhances product and customer analysis of profitability. It also improves employee performances in the workplaces. To achieve all these positive factors in a workplace an organization has to adopt activity-based costing
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