MANAGERIAL ACCOUNTING

Managerial Accounting

Managerial Accounting

Any business small or big needs resources and people to carry out the activities. The management team of the business must achieve the goals with the resources, people and activities. The four important roles of a management team is decision making, planning, directing operational activities, and controlling. These four activities are impossible without the information from the managerial accountant analysis. The information that a managerial accountant analysis provides can be used in making day to day decisions or long term decision making. Most of the data provided is financial but some organizations are also using substantial non-financial data. Managerial accounting uses much of the same information as financial accounting, but can be tailored to fit the specific needs of the manager at a given time. Financial accounts are prepared for a given period, usually one year, while management accounts can be prepared for any period. For example, retail businesses often prepare daily reports on sales and stock levels (Comparison of financial and management accounting, 2005). Managerial accounting involves more than just financial statements. Managerial accounting can include cash flow analysis, break even analysis, budgeting, and financial ratio analysis. Management accounting can be used to plan for the future by understanding how economic events affect the business (Bromwich, 1988). Managers can evaluate the state of the business by looking at efficiency, and analyzing costs.

Start up Cost

If your desire is to run your own Clothing store business it is important that you are aware of the start-up costs that will attach to this choice. By understanding this financial issue, you will be able to ensure that you have the correct funding in place to give the business a good chance of success.

If you are purchasing freehold this start-up cost will include the deposit paid for the premises together with the legal costs relating the transfer of ownership to your name and, if appropriate, (Haaz 1999) the costs involved with securing a loan or mortgage on the premises. Even if you are leasing the premises, all of the ancillary legal costs mentioned above will be incurred. The only difference in this case is that you might need to pay a lease premium and rentals in advance instead of the property deposit.

Fixtures, fittings and equipment

You have an empty shell of a room or shop. Now you need to start putting in place all of the furniture, fixtures, fittings and equipment that you need to run the business. This will include items like waiting furniture, desks, cupboards, computers, telephones and a host of other accessories that a skincare business might require(Haywood Wygal 2004). Make sure that the cost of these items is included in your start up finances or at least the deposit if you are purchasing through hire purchase or loans.

Stock

You might believe that stock is not a start up cost, as it will be purchased during the normal course of business. However, the worst position you can get yourself into is a) not having sufficient quantity of products ...