Forums Accounting The role of management accounting in the organization

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    Ayush Nair
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    The role of management accounting in the organization

    #16661

    Ayush Nair
    Member

    a) Formulate Financial Strategies– Financial strategies with the help of sales forecasts, budget, job costing techniques and other managerial tools can be formulated by the management accountants. Data can be taken from various financial statements to make strategies to enhance profit and earnings per share.

    b) Financial Consequences of Decisions– When senior leaders make changes in the capital structure of the company; accountants can help the leader by telling them the advantages and disadvantages of adding debt or equity. Some of the decisions look good but they are really good or not is found when the company digs into the number.

    c) Monitoring Expenses– Management accountant creates reports and budgets which helps the department heads about the allocation of the expenses. This is so important because all the operating expenses have a direct impact on the profit. Management can select optimal techniques which will help the company in running as efficiently as possible.

    d) Maintenance of Profitability– There are various tools which help the management in keeping their business profitable. For instance, break-even analysis. With this analysis, the company measures sales against variable and fixed cost and determine a point where the company will be a balance.

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