Managerial Accounting applications
Overview
Managerial accounting deals with the financial management of an organization and its analysis, interpretation, measurement, and identification. The financial information gained through managerial accounting is conveyed to the management to enable them to make informed decisions towards achieving the goals of the organization. It includes essential concepts such as job order costing, process costing, activity-based costing, profit planning, inventory planning, and others.
Skills present before the class
A manager needs to have some pre-requisite skills before learning managerial accounting. This makes the concepts easier to grasp and helps in a better understanding of the skills by providing a new perspective to the candidate. Prior to this class, I had excellent communication and accounting skills. I can work as a part for the team, and also can adapt to any form of change and situations. Other effective business skills that are required for this are good knowledge of the organization in which the manager is employed (Ibidunni, Ogunnaike, & Abiodun, 2017).
Skills acquired through this class and their relevance
There are many skills that I have gained in this class, which will help me in my career as a manager. They are:
- Strategic management skills: it will help me understand my goals and devise a plan toward achieving it. The main focus should be gaining a more extensive customer base, and focus on increasing revenues
- Risk management skills: this helps in identifying the risks present within the company, and develop appropriate responses towards them so that the company can be reasonably sure of meeting its goals (Vij, 2019).
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- Process management skills: it will help me in regulating the existing business processes, which are a series of steps that are followed by businesses to carry out tasks. It also determines how well the departments inside a company communicate with each other and constitute the business processes.
- Measurement skills: these are the skills that would help me in solving challenging questions by formulating data-driven answers to them. This will help me in my management as I would be able to explain my point of view by analyzing the problem and its needs. Furthermore, it will help in making informed decisions and facilitate the ability to learn from past mistakes.
How is managerial accounting useful for my company?
Managerial accounting can be very much useful for a company that is aiming to maximize its revenues and plan for future expansion. Moreover, it helps the managers present in the company to perform their job with relative ease. Some of the usefulness of managerial accounting for a company are listed as below:
- As discussed above, it helps in planning and forecasting the future needs of the company, and helps steer the direction of the financial growth of the company for months and years. It also helps in the formation of a capital budget, which allows in capital expenditure.
- It is helpful on cost-based analysis of an ongoing project which helps in compiling reports
- Assists in determining the outlay of cash and capital in a project
- It helps in performance tracking, which in turn helps in forecasting and budgeting. This limits the cost overruns and makes sure the performance of the production is competitive (Mihaela, Ioana, & Diana, 2019).
Apart from these, managerial accounting also keeps in check the financial health of the company, by enabling the managers to make short term and long term decisions about it. It also helps in taking operations based decisions, which helps in ensuring that the company has operational efficiency and credibility. Managerial accounting is critical in ensuring that the forecasted budget and the actual production costs are mostly in the same range.
References:
Ibidunni, A. S., Ogunnaike, O. O., & Abiodun, A. J. (2017). Extending the knowledge strategy concept: Linking organizational knowledge with strategic orientations. Academy of strategic management journal, 16(3).
Mihaela, H. Ș., Ioana, T. O. N. E. A., & Diana, H. I. (2019). MANAGERIAL ACCOUNTING–A TOOL FOR MEASURING AND PILOTING THE OVERALL PERFORMANCE. THE ANNALS OF THE UNIVERSITY OF ORADEA, 28(2019), 150.
Vij, M. (2019). The emerging importance of risk management and enterprise risk management strategies in the Indian hospitality industry. Worldwide Hospitality and Tourism Themes.