Discussion: Managerial Accounting
The lesson that I found most practical and easy to learn was management planning and especially budgeting which essentially can be looked as management plans expressed in quantitative manner. Budgeting is something that most people do on a regular basis because it involves setting goals, determining the source of resources to meet the identified goals.
Often, I am required to make a budget for a whole month on how to spend my pocket money; usually it involves knowing how much money I have at the beginning of the month, how much I would need in the course of the month and how much I would keep at the end of it. At the beginning it was difficult, I couldn’t tell who and what department was supposed to start the budget making process for instance. But what I learnt is that in most companies the convention is that the budget making process is done by the accounting department under the direction of the controller. Various Departments such as personnel department and marketing are given targets and goals and detailed breakdown of expected expenses and finally all these is compiled and form of budgets.
The lesson that I found difficult to fully comprehend and get my head around is the cost that are associated with managerial accounting. That’s because it has something to do with my lack of background knowledge in financial accounting and cost accounting and partly because cost that are learnt in managerial accounting are just so many and it needs lots of hard work to have it all covered.
Something else that you need about managerial accounting is that it is meant to provide information for managers so that they can make better decisions. Unlike financial accounting that is obligatory and done mainly for external consumption managerial accounting helps a manager to assess the performance of a company
Atkinson, A. (1997). Management accounting (2nd ed.). Upper Saddle River, N.J.: Prentice Hall.