Management Accounting - Explain the different method used for management accounting reporting

 

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Budget Report

• Budget reports help small business owners analyze their company's performance and if the business is big enough, managers analyze their department's performance and control costs. The estimated budget for the period is often based on the actual charge from previous years.
• The managers also can employ budget reports to provide excitation to employees. In this case, some of the funding budgets may be distributed as rewards to employees for meeting particular financial goals.

 

Accounts Receivable Aging Report

• The accounts receivable aging report is an important tool for managing cash flow for companies that extend credit to their customers. This report breaks down the customer balances by how long they have been owed. Most aging reports include separate columns for invoices that are 30 days delayed, 60 days delayed, and 90 days late or more.
• The manager can employ the aging report to find issues with the company’s collections process. Periodically analyze the accounts receivable aging also keeps the collections department from overlooking old debts.

 

Job Cost Reports

• Job cost reports show charges to the specific item. They are often equated with an estimate of revenue, so the company will assess the job’s profitability.
• Job cost reports are also used to analyze expenses while the project is in progress so managers can correct areas of waste before the costs escalate.

Inventory and Manufacturing

• The Firm with inventory can employ management accounting reports to make their manufacturing processes more efficient. These reports generally include items such as inventory waste, hourly labor costs, or per-unit overhead costs.

 

Profit & Loss Statement

• The profit and loss statement, also be called the income statement, is a listing of all income generated and expenses incurred by the business or department. This report is simply showing the profit or loss generated by the firm's operations. The Income statements can be generated for the overall firm and also can be broken down by department, provided departmental income and costs are recorded.

Operating Budget

• An operating budget is the important report for managers and production supervisor to censor, because it documents the prospective revenues and expenses for a time period and consent, they to inspect the difference of the budget compared for actual results. The operation budget is an advantageous tool to planning the expenditure of the business over a period of time.

 

Performance Reports

• Management accountants employ budgets to contrast actual expenditures and revenues to budgeted amounts. All information related to these amounts is listed out on the performance report. Performance reports will be calculated every year, but some companies create them monthly or quarterly.

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