Managerial Accounting

Managerial Accounting

Managerial accounting is an important aspect of every business. The operation, costs, functions, and profits all go through the various methods that indicate profit or loss. The organizing, annotating, and methods used to identify where all the money goes is done through managerial accounting methods. So essentially managerial accounting can be defined as a system that is a loosely structured set of tools, methodologies and framework a company uses to monitor costs, create efficient budgets and make money. The purpose of this system is to provide a business with the goal simultaneously going for quantity and quality. In other words, the business purchases as well as establishes all tools conducive to profitability management and cost reduction, without forgetting to pick the best programs available in the market. A managerial accounting system includes tools such as cost-analysis systems, computer-aided manufacturing equipment, budgeting programs and financial accounting software (Codjia 2013). Managerial accounting is vital and is a necessity required to profit in several different areas of a business.

The role of managerial accounting has several purposes. The major purpose of management accounting in the organization is to support competitive decision making by collecting, processing, and communicating information that helps management plan, control, and evaluate business processes and company strategy (Davis 2013). The interesting thing about management accounting is that it is rare to find an individual within a company with the title of “management accountant.”

Since individuals rarely are management accountants there are several other people that are amongst the company that have to do with finances. Often many of the individuals that function as accountants within the organization have different titles, but these individuals typically operate as financial accountants, costs accountants, tax accountants, or internal auditors...