In order to understand what management accounting is, it is necessary to give a classification of its components. Key indicators of this system include:
- planning income and expenses;
- attraction of financial resources ;
- distribution of incoming funds, which should be made in strict accordance with planning;
- accounting of expenses actually incurred by the business entity, and comparing them with projected indicators;
- reporting on received and spent resources both for internal use and for external consumers;
- exercising control over all of the above processes.
Thus, management accounting in an enterprise is a combination of planning, financing and spending, as well as control over all these actions, made using reporting. The implementation of all these processes is necessary to provide information to managers and supervisors, on the basis of which decisions should be made aimed at improving the efficiency of the organization. Management accounting at the enterprise sets itself the task of planning, determining costs and controlling them. At the final stage, administrative decisions are made.
The planning process is to determine the actions that will need to be taken in future periods. It is based on the analysis of already obtained performance indicators of the enterprise.
Accounting for costs incurred in the production process begins with the collection of information regarding costs incurred in the procurement or during the release of goods or services. The establishment of control should ensure real planning related to the organization’s activities and track the implementation of forecast indicators by analyzing deviations in case of their occurrence.
After all these stages, management accounting at the enterprise helps to fulfill the final task - making the right decision aimed at more efficient production.
The information that is provided to develop a strategy for the business entity has traditionally been financial and provided in monetary units. Recently, management accounting at the enterprise has expanded its borders. To make the necessary decisions, additional physical and operational data are collected regarding the quality of the products and the duration of the process.
Subjective indicators, such as customer satisfaction and operational characteristics of a new product, as well as the creative potential of the enterprise team, began to be taken into account.
Thus, the information necessary for management accounting includes operational and financial data characterizing the activities of a business entity and processes carried out with the aim of releasing finished goods, as well as information about the structural units of the organization, its products or services, and customers.
The proper organization of management accounting at the enterprise is an extremely important factor for its normal development and functioning. With the help of the necessary information, managers and managers develop the necessary activities of the organization. Strategic objectives are determined taking into account existing material resources and consumer demand.
Properly organized management accounting will allow you to really assess the existing external and internal factors that affect the solution of specific problems, and ensure the relationship between the structural units of the organization. An analysis of the indicators provided will also help reduce costs and open up additional internal sources of resources.