In: Accounting
The effectiveness of one or two key management accounting techniques- Couple of major key management accounting technique as below :
Financial Planning – Main objective of any business Organization is maximization of profit .Financial planning is one of teh best tool in this matter.
Financial Statement Analysis – Financial Statement analysis always help management to understand about revenue growth , business growth , any challenged in relate to revenue + any cost over run . Thsi analysis done through comparative analysis ,ratio analysis etc.
Cost Accounting – complete cost accounting system – product wise ,process wise , department wise . use of standard costing system and determined Favourable + Unfavourable position
Cash flow analysis – Top most important analysis for any organization , With help of this analysis , Management can understand about total cash flow position at Operating , Investment and financial level . This analysis helps to understand any challenge in Working capital movement , any working capital blockage exist or not . With this analysis ,we get to know company total movement of debt issue , repayment , dividend , Interest movement etc .
Marginal costing – With help of this costing system , we can tale decision of “ Make or buy” . We can decide to utilize resources at optimum level . Best way to understand multiple product mix , sales mix , derive of contribution etc
Budgetary control - This is almost in line with financial planning . Company used to prepare annual budget as well as Quarter budget and do comparison the same and determined variance . Management has to review budget number with Actual position and any negative variance , must be take necessary step