ACCOUNTING

Accounting

Accounting

Single biggest positive impact that accurate accounting can have on an organization

Accounting is defined as a collection of data in a systematic, structured, and valuable quantitative information expressed in currency units on the transactions. It is the art of recording the data then classify it and summarize in a prominent manner in the monetary terms and last interpret the results. Bookkeeping can be defined the recording of the transactions on a daily basis in an unsystematic way. Accounting is divided into different types: financial accounting, management accounting, tax accounting, etc. Here, we will focus mainly on the impact of managerial accounting that what's the biggest impact we can have with accurate management accounting.

Management accounting, which is also, commonly known as managerial accounting deals with the provision and use of accounting information of the company or entity by the managers within the organization. This accounting information provides the manager with the relevant information and basis for make better decisions for business and enable better management of their control functions. The application of management accounting information is as follows

1. Primarily it is designed to be used by the internal stake holders of the company such as managers within the company or organization.

2. The information it contains is of the critical importance and confidential as well and intended to be sued only by the management of the company, instead of public reporting use.

3. It emphasize on the future decision making, instead of historical.

4. Normally, it is created by the use of the management information and accounting systems.

Biggest Impact of Managerial accounting on organization

These days, a management accountant, has a dual role in an organization in terms of dual reporting relationships. As a provider of decision based operational information, and strategic partner, it is their responsibility to manage business teams and at the same time, they are required to report responsibilities and relationships to the corporations finance division (Ammons, 2002).

The activities provided by the management accountants are inclusive of planning and forecasting, performance variance analysis; monitoring and reviewing costs associated with the business are the ones that have double accountability to both finance and the business team.

For instance, the examples of tasks in which accountability is more important to the business management team against the corporate finance division are the development of new product costing and system, business driver metrics, client profitability analysis, sales management score carding, and operations research. Specifically the businesses and companies who derive most of their profits with the use of the information economy such as publishing companies, banks and telecommunication companies, It expenditure of these companies are a significant source of excessive and uncontrollable spending (Boyne, 2002). Most of the times it is the greatest cost after property related costs and total compensation costs for the companies. A function of managerial accounting works closely with the IT department in order to provide transparency of IT costs.

Five best accounting practices that should be applied to any business:

Private Accounts

It is one that classifies logs and ...