Management accounting is a very important and useful element that use to manage the area of finance in an organization. For example, Management accounting has brought many of the benefits to manage the income and outcome of the finance in the organization to provide a more sustainable operation of the organization.
Management accounting has provided many tools to analyze and observe the situation of the finance of an organization. Management accounting is may very helpful to identify and forecast the specific market environment and observe the trends that may bring the impact to the company business to find the chance and create the value. For example, the sales report, purchasing, profit report can give the information needed in management accounting. Management accounting can be very considerable in risk management, which may be very helpful to identify the risk and decrease the risk in a more effective way. (White, 2015)
Besides that, management accounting may apply some of the techniques and tools such as the planning of the natural resource that still available, lifecycle costing of the product, investment, return of investment. Management accounting may be based on those information and product the report that includes the data that may be related to the changing and impact of the market, and it will very helpful in the decision making by the other department to make a better and suitable decision in a long-term or short-term strategy.
Other than that, management accounting may Synchronize the financial situation of an organization with the strategy implementation and business model of an organization. For example, the budgeting of financial management can increase the efficiency and effectiveness in the usage of capital, expense, and others to increase the performance of the operation of the organization. Management accounting is also playing the role of forecasting the cash flow, which is to predict the upcoming cash surpluses or the shortages in the future and give the organization some of the time to prepare themselves to face the new situation in the market. For example, management accounting will tell decision-makers about the situation and doing decisions, just like how much-expected capital will be used, how many additional human forces needed to be hired, and so on. (FONTINELLE, 2019)
At last, it may be concluded that management account is a very important skill to an organization to set a benchmark and guild their business towards the right path and to be successful in the changeable market with the ability of the management accounting just like forecasting the trends and cash flow controlling and monitoring of the finance and so on.
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