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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

The Management Process Internal Accounting System

Planning Budgets, Customer


Special Reports surveys
Corrections and Revisions

•Increase
of Plans and Actions

Competitor
Financial analysis
Productivity
Accounting Advertising
System impact
New items
Controlling report
•Actions Performance
•Evaluations Reports
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 Introduction
t to Market

Mature Product
Market 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 Design Production
t

Customer
Marketing Distribution
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 authority-
is granted to managers who
supervise subordinates and
are accountable for assets and
operations.

Staff authority-
is the authority to advise and
support management
personnel.
Organization Chart

Controller

General Internal
Taxes
Accounting Audit
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:

Confidential
Competence
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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