Question

List and briefly describe 5 examples of how management accounting information could assist in managing resources at a Banking corporation.

Answer 1

Management accounting information means preparing reports and accounts which are provided to the management who use the information to make policies for the company and facilitate decision making. The reports mentioned here provide accurate and timely financial and statistical information to the management. Management accounting information is important to managing bank's resources in the given ways:

1. Bank managers require such reports to determine the fee/interest charged by bank for providing its services .

2. Such reports are also used for cash management.

3. Loans are the main revenue generating service provided by the bank. The reports can also contain details regarding the loans given by the bank (their repayment, NPA details, collateral etc.) for their analysis by the bank manager, such as loan mix, whether loans are operating effectively etc.

4. Providing market analysis to the managers so they can gain a better understanding of the trends in the market, whether there is a need to launch a new product, are bank guarantees/LC financially viable or not etc.

5. These reports generate valuable insights about the company's overall performance. These can be used by the managers to streamline their operations, improve customer experience and achieve better financial performance and an enhanced consumer image.