Strategic Management Accounting Essay Example | Topics and Well Written Essays - 2250 words

Strategic Management Accounting - Essay ExampleCurrent Situation electronic Boards plc is electrical engineering partnership and it has been in the business since 1970s. Company has almost 200 employees and it has been profitable everyplace the last several years. Since establishment to 1985 company has been conducting operations without maintaining true accountancy systems. However, financial crisis has hit the company and it recorded a loss of ?1.7 million. This loss also had an impact the liquidity position of the company. The companys fencement director Jack Watson has recently decided to develop the management accounting system for the unattackable to keep the track record of entire operations and to solve sure that the company is able to gain how different products are performing. This report will analyze and outline the main factors that the company needs to choose in establishing a useful management accounting function within the company. ... Investing In diametrical Projects It has been found that the company directly purchases new technology or equipment in order to improve the productiveness without analyzing the cost and benefit ratio of the investment. Therefore after establishing accounting system, the management would be able to make decisions by analyzing the cost and return of the investment and thus it can be helpful in change magnitude the profitability as only profitable investment will be accepted and others will be rejected (Jaffe, 2007). Moreover, it will be helpful in reducing the interest charges and high bank charges as the company will not be investing in every other technology that comes up. Identifying Areas Of Improvements As the company will have proper management accounting system, so with this the company will be able to identify areas where it can reduce costs and thus it can be helpful in increasing profitability. CONCLUSION Management accountings system, once developed, will provide more insight about the live statu s of business and would enhance its capacity to ability to develop and enhance its capacity to compete and compute its future needs. Moreover, the company would be able to improve its profitability and at the same time manage situations like recession in a better way. References Jaffe, J. (2007). corporate Finance, Pashupati Printers Pvt Ltd Delhi. Keown, A., Martin, J., & Petty, J. (2011). Foundations of finance (7th ed.). Boston, MA Prentice Hall. Johnson, G., & Scholes, K. (2001). Exploring Corporate Strategy Text and Cases. 6edition, Prentice-Hall