the senior accountant’s role

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It measures and reports financial andnonfinancial information that helpsmanagers make decisions to fulfill the

goals of an organization.

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Its focus is on reporting to external parties.

It provides financial statements based ongenerally accepted accounting principles.

It measures and records business transactions.

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It provides information for both managementaccounting and financial accounting.

It measures and reports financialand nonfinancial data.

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It describes the activities of managers inplanning and control of costs.

It is a key part of general management

strategies and their implementation.

It includes the continuous reduction of costs.

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Developing strategy

Building resources and capabilities

Implementing strategy

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CurrentAssets 

Long-TermProductive

Assets 

IntangibleAssets 

Building resources and capabilities

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Management Decision Management Accounting System

Planning

Control

PerformanceEvaluation

Budgets

AccountingSystem

PerformanceReports

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What is planning?

Setting

goals

Predicting

results

Deciding how

to attain goals

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What is control?

Decidingand

takingactions

Deciding onperformanceevaluation

and feedback

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What are budgets?

They arequantitative

expressionsof a proposedplan of action.

They aid in thecoordination

andimplementation

of the plan.

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What are performance reports?

These are reports thatcompare actual results

with budgeted amounts.

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Budget Actual VarianceRevenues $59,000 $60,000 $1,000 FCost of goods sold 42,000 43,400 1,400 UWages 6,700 7,000 300 UGeneral 1,300 900 400 FFixed costs 5,000 5,000 0Operating income $ 4,000 $ 3,700 $ 300 U

Enterprise, July 2011

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Receivable Turnover Ratio is one of the accounting activity. Thismeasures the number of times, on average, receivables (e.g. AccountsReceivable) are collected during the period. A popular variant of thereceivables turnover ratio is to convert it into an Average Collection

Period in terms of days

Formula: Net Credit Sales__________________Account Recievable

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the Inventory turnover is a measure of the number of times inventory issold or used in a time period such as a year. The equation for inventoryturnover equals the cost of goods sold divided by the average inventory.

The formula for inventory turn over: Cost of Good SoldAvg. Inventory

The formula for average inventory: Beg. Inventory+End.Inventory2

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the ( ) measures how long a firm will bedeprived of cash if it increases its investment in resources in order toexpand customer sales. It is thus a measure of the liquidity riskentailed by growth

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This involves managers examining past performance

and systematically exploring alternative ways tomake better informed decisions in the future.

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This involves comparative analysisfor decision making.

This role asks: Of the several alternativesavailable, which is the best?

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This involves accumulating data andreporting reliable results toall levels of management.

This role asks: How is the business doing?

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This involves helping managersproperly focus their attention.

This role asks: Which opportunities andproblems should be emphasized first.

Attention directing should focus on allopportunities to add value to an organization,

not just cost-reduction opportunities.

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Customer Focus

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This theme has two related aspects:

1. Treat each of the business functions in the valuechain as an essential and valued contributor.

2. Integrate and coordinate the efforts of all businessfunctions in addition to developing the capabilitiesof each individual business function.

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Supply chain  – describes the flow of goods,services, and information from cradle to grave,regardless of whether those activities occur inthe same organization or other organizations.

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These are operational factors that directly affectthe economic viability of the organization.

Cost – organizationsare under continuous

pressure to reduce costs.

Quality  – customersare expecting higher

levels of quality.

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Time  – organizations are under pressure tocomplete activities faster and to meet

promised delivery dates more reliably.

Innovation  – there is now heightened recognition

that a continuing flow of innovative productsor services is a prerequisite to the ongoing

success of most organizations.

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Continuous improvement by competitors createsa never-ending search for higher levels of performance within many organizations.

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The term “value chain” refers to the sequence of  business functions in which usefulness is addedto the products or services of an organization.

The term “value” is used because as the usefulness of the product or service is increased, so is its value

to the customer.

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Management accountants provide

decision support for managers in thefollowing six business functions:

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R & D Design Production

Marketing Distribution Service

Financial Accounting

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Research and Development 

It is the process that is conducted to generateand experiment with ideas related to new

products, services, or processes.

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It is the detailed planning and engineeringof products, services, or processes.

Design

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It is the acquisition, coordination, andassembly of resources to produce

a product or deliver a service.

Production

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It is the manner by which companiespromote and sell their products

or services to customersor prospective customers.

Marketing

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It is the after-sale support activitiesprovided to customers.

Service

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Line management is directly responsible forattaining the objectives of the organization.

Staff management exists to provide adviceand assistance to line management.

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