At the moment, accounting management accounting can be defined as activities that take place at one enterprise. It provides the management apparatus of the business entity with the necessary information that is used for planning, control and management of the organization.
The whole process includes the identification, collection, preparation, analysis, interpretation, reception and transmission of information that is necessary for the control apparatus to carry out the functions assigned to it.
Accounting management accounting is an area and a research system at the same time. It is an important element of the organization’s management system. It can also be designated as a link connecting the accounting process and enterprise management.
Accounting management accounting is designed to:
- provide the necessary information to the administration in order to effectively manage production and make rational decisions in the future;
- calculate the actual cost of production, as well as identify deviations from norms, estimates and standards;
- determine the financial results of already sold products, new technological solutions, etc.
Accounting management accounting has a subject and an object. The subject is the production management of the enterprise as a whole, as well as by departments. Transactions that are purely financial in nature do not relate to management accounting. Among them are the purchase, sale of property, leasing and rental, operations with securities, investments, etc.
The objects of accounting are:
- organization costs (capital and current);
- the economic results of the enterprise;
- internal reporting;
- budgeting;
- internal pricing.
Accounting management accounting has the following objectives:
- information support for managers, assistance in decision making;
- planning, forecasting and control of the economic and managerial activities of the organization;
- selection of optimal paths for the effective development of the enterprise.
Accounting and management accounting is aimed at solving the problem of compiling internal reports. They should include information about the general financial condition of the enterprise, as well as how the production proceeds. The content of these reports may vary depending on what goals will be set and to whom the final result of the work will be delivered.
Accounting management accounting is carried out using the following methods and techniques:
- documentation and inventory;
- balance sheet reporting and synthesis;
- statistical index methods;
- economic analysis (mainly factorial);
- mathematical (linear programming, correlation, etc.).
These methods are often integrated and create a single management accounting system. It is conducted at the enterprise independently, without the participation of state bodies. Nevertheless, its management in the organization is simply necessary both for the company itself and for interested persons.