Issues of Managerial Accounting Essay
Managerial accounting is concerned with providing information to managers – that is , people inside an organization who direct or control it’s operations. Via managerial accounting managers understood that good business results come from dynamic processes , procedures and practices that are well designed and properly implemented and managed. Certified management accountants are qualified to help their fellow managers achieve good business results because they have earned an advanced certification that addresses all important aspects of accounting inside organization.
The role management accounts play within organizations supporting decision making , planning , and control. In short , the emphasis in business and the role of accounting should be more about doing business rather than tabulating and reporting historical financial results. Now a days , management accounting plays a very important role for the success of an organizations. The current and contemporary issues of management accounting in manufacturing and service sector is developing the skills of the manager.
Besides , Management accounting information is a useful ‘language’ to enable better collaboration between engineers, designers, marketers and other parties involved in product development, including suppliers. Managing suppliers is an important element of controlling production costs, and there are significant benefits to involving them and sharing data and specifications at an early stage of product development. Contemporary issues of management accounting plays an impact over manufacturing sector.
Current issues help advanced manufacturing techniques (both production technologies such as robotics and management tools such as just-in-time) led to a reducing proportion of costs being accounted for by direct materials and direct labour. Other parts of the value chain therefore become more important than the production line, for example, relationships with suppliers and customers. Globalisation has increased the importance of supply chain management, as risk and costs increase with complexity.
Management accountants can help develop a strategy to manage suppliers so that they fit in with the company’s own lean production methods and pursuit of value added. Management accountants can help companies analyse their value chain in order to understand better where the most value is created; and where costs arise. Using techniques such as whole of life costing, this analysis can extend beyond point of sale to the customer. Management accounting started as a discipline to support better manufacturing decision making.
Although the discipline has evolved to also support service industries and not-for-profit organisations, it has also evolved to keep pace with new developments in manufacturing technology and practices. So we can understand how current issues of management accounting plays an impact in manufacturing sector. We will discuss about few important contemporary and current issues of management accounting and how this issues are helping a organization to gain it’s goal and to develop day by day. Some contemporary issues of management accounting are –
TQM (Total quality management) : TQM is a set of management practices throughout the organization, geared to ensure the organization consistently meets or exceeds customer requirements. TQM places strong focus on process measurement and controls as means of continuous improvement. TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is invoved with the creation or consumption of the products or services offered by an organization. Cross Functional Product Design :
Cross functional product development is a widely used method for involving different functional areas in new product/process development. This process refers direct labor employees are involved to a great extent before introducing new products or making product changes. And manufacturing engineers are involved to a great extent before the introduction of new products. And in cross functional product design there is a little involvement of manufacturing and quality people in the early design or products before they reach plant.
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