Managerial Accounting Analysis of Concepts and Techniques

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Managerial Accounting Analysis of Concepts and Techniques Managerial Accounting BUS 630 Managerial Accounting Analysis of Concepts and Techniques Introduction/Thesis Statement Managerial accounting is a concept used in businesses to manage internal systems. Understanding the importance of effective decision making, planning and control creates a foundation for value within the company on a more in depth level. Planning and controlling is measured by performance based on budgeting accounts. Understanding the concepts and techniques used in managerial accounting helps to insure functioning operations within each department and has the ability to create a completive edge. Competitively speaking, managerial accounting gives…show more content…
Therefore, management decides it would be much more beneficial to be a citywide organization instead. Role of Managerial Accounting The role of managerial accounting serves many purposes such as financial reporting, budgets, forecasting, internal controls and management support. The accounting department also supports management in different business operations, providing analysis and support for different decisions and investments (Vitez, 2013). Management accountants work at the beginning of the accounting cycle, recording the financial transactions of a company as they occur (2013). This business role ensures that companies have a good understanding of their financial health, giving executive management the ability to make informed decisions. Companies use budgets to ensure that they do not spend more money on business operations than is necessary to generate profits (2013). Management accountants will prepare budgets for each department and then add them together to create one companywide budget. Tracking expenses that over exceeds the budgeted amount is an important step in the managerial process to insure the company is within the profit and loss guidelines. Capital improvements are also included in the budgeting process so businesses can plan on improving current facilities (2013). Forecasting is based on past information and is used to remove random variations within each
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