Management Accounting Singapore
What Is Management Accounting?
Management accounting is a preparation process of providing accounts, financial reports to managers who require accurate and up-to-date statistics about the business so as to make better short term or long term finance planning and decisions for the organisation. In management accounting or managerial accounting, finance reports with trend charts, variance analysis are generated weekly or monthly for internal management departments with in depth statistics of cash flow, sales revenue, outstanding debts and inventory.
Financial Accounting vs Management Accounting
The main difference between financial accounting and management accounting is that the former provides reports of finance information to external parties annually such as Singapore IRAS tax authorities while the managerial accounting is used mainly for internal purposes. Most SME or small businesses in Singapore are not able to sustain in the competition because many failed in detecting the actual danger that often lies in the unknown hidden where naked eyes cannot detect. Although many entrepreneurs only look at 1 report which is the income statement, managerial accounting support the business to navigate away from any potential dangerous situation with useful financial statements in 3 areas.
Performance Measurement, Planning and Budgeting For Singapore SME
Managing department will be interested in tools and techniques such as how to effectively measure the business performance and make necessary planning or adjustments as well as budgeting. Management accounting help to provide detailed information such as product costs for goods sold, period costs of operating expenses where managers can perform cost classification on direct materials cost, direct labour cost and overhead costs. By performing cost analysis on the types of cost, cost behaviour and other factors such as costing system design, activity-based costing, analysis of cost-volume-profit, operation managers are able to plan better and manage cash flow with regards to what to sell, how to sell, where to sell for profits in Singapore. Master budget and capital budgeting where payback period, net present value are some of the techniques to help with cash inflows, outflows which are are critical for business operations. With good budget planning, inventory management and decision making, Singapore SME business operations can achieve better improvement in efficiency and profits.