Question

Management Accounting is the presentation of accounting information in such a way as to assist management in the creation of policy and day to day operation of an undertaking. Elucidate this statement giving suitable illustration.

Answer 1

Explanation:

There are still inefficient and error-prone tasks in the workplace, such as organizing and listing information and filling the blanks of internal documentation. Many of these simple tasks are tedious and time consuming, and often reduce the performance of talented employees.

To deal with this, outsourcing tasks have become common. However, because outsourced work is still done by people, inspections are still needed by internal staff. Other issues include the risk of employees resigning or retiring who are used to performing these tasks. As basic solutions to these problems, automation tools such as software programs and AI are attracting attention.

Regardless of industry or job type, business automation has been adopted by multiple companies. Especially in accounting with many routine processes, the automation of tasks such as the optical character recognition (OCR) of invoices, the classification of data into accounting software, processing monthly and quarterly billing procedures, and preparing tax reports are progressing. Automation will increasingly become an integral part of the business to achieve a way to maximize effectiveness with limited personnel.

Answer 2

Elaborated explanation on Management Accounting

Explanation:

• Management Accounting or Managerial Accounting is the process of providing financial information and other resources to the management or managers of an organisation to assist them in decision making process

• The information provided by the Management Accounting is used only by the Internal team of the organisation,making it the only point which differs it from Financial Accounting.

• It uses statistical data to take better and precise decisions,helps controlling the organisation and helps in overall development.

• The following are the advantages of Management Accounting when it comes to policy making and handling day to day operations:

1. Better Decision Making: Techniques like costing,economics,statistics,etc. are used to provide data presented via charts,forecasts,tables,etc.
2. Planning: Managers can use the data provided by Management accounting to make plans or plan the activities of the organisation.
3. Strategic Management: The data provided can be used by the Top Management to guide the different Strategic Business Units(SBUs) of the organisation to make their sales/activities/management better and efficient.