Determine the Functions of management accounting:
1. Planning and forecasting: management fixes various targets to be achieved by the business in near future. Planning and forecasting are essential for achieving business objectives. One of the important functions of the management accounting is to help management in planning for short term and long term periods and also in making forecasts for the future.
2. Modification of data: management accounting helps in modifying accounting data. The information is modified in such a way that it becomes useful for the management.
3. Financial analysis and interpretation: management accountant undertakes the job of presenting financial data in simplified in way. Financial data is generally collected and presented in a technical way.
4. Facilities managerial control: management accounting is very useful in controlling performance. All accounting efforts are directed towards control the enterprise. The standards of several departments and individuals are set up.
5. Communication: management accounting establishes communication within the organization and with the outside world.
6. Use of qualitative information: the field of management accounting is not restricted to the use to monetary data only. It collects and uses qualitative information also.
7. Helpful in taking strategic decision: management accounting helps in taking strategic decision. It supplies analytical information regarding various alternatives and the choice of management is made easy.
8. Coordinating: the co-ordination among different departments is essential for smooth running of the concern. Management accountant as a co. Coordinator among different financial departments through budgeting and financial reports.
9. Supplying information to various levels of management: every management levels of needs accounting information for decisions making and policy execution. Top management takes broader decisions and leaves day to day decisions for the lower levels of management. Management accountant fees information to different levels of management so that further decisions are taken. The supply of adequate information at the proper time will enhanceefficiency of the management.