Management accounting is a clear system

Management accounting is the process during which identification, measurement, as well as providing all the necessary information revealing the essence of the company's economic and financial activities takes place. Knowledge of the indicators of the company's operational processes contained in the relevant reports is a necessary link involved in planning, administrative procedures and evaluation of the firm's performance. Management accounting is also a prerequisite for solving the problem of rational use of all resources and the completeness of their accounting.

The administrative functions of the organization include several stages. After setting goals , planning is carried out. Then follows the fulfillment of the assigned task and the control over its solution. Further, the analysis of the performed works is carried out and the administrative influence is formed. As a result of the passage of this cycle, an idea is formed about the current situation in the company.

The effectiveness of strategic and operational decision-making by the leader is directly dependent on the completeness and quality of the information provided to him. That is, management accounting is a whole system whose purpose is to support the conduct of business on the basis of an analysis of indicators of economic and financial activity.

The reporting provided to the head serves to create an objective picture of the availability of resources and their effective use. This information is necessary to achieve the company's goals. In this regard, the correct organization of management accounting is the most important task. It stands in front of any enterprise. The first step in preparing the required reporting is the reflection of the basic operations. They are entered in certain registers. This is called operational or primary accounting.

To make administrative decisions, the manager must see the company not only as a single link. It is important to objectively assess the effectiveness of each unit, as well as the degree of rational use of available resources. It is also necessary to find out the needs of customers and suppliers' proposals. Any situation should be provided in different angles and have a sufficient degree of detail or generalization.

The upper level of the management accounting system includes generalized indicators of financial activity. These registers serve for setting the main tasks and indicating common guidelines for successful commercial activity.

The following levels of information provide the ability to determine the causes and analysis of indicators that are generalized. These registers serve to provide information of a more detailed nature on the amount of interest by means of deployed data. On their basis, it is possible to conduct an analysis of the causes of the existing deviations from the normative index. The information of these levels is provided on the basis of operational requests of the management or according to a pre-set schedule.

Management accounting is a clear system, the construction of which is based on one basic principle. It involves setting a task for reporting, which should support the timely adoption of an administrative decision and be oriented towards the achievement of future goals.

Management accounting is designed:

- to measure the results of the current work of the organization;

- Ensure the clarity and clarity of the strategic objectives;

- focus on critical indicators and key points;

- give a clear picture of the improvement or deterioration of all performance indicators of the enterprise;

- be the basis for motivating the team.