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Management Accounting and Essential Requirement - Williams Performance Tenders


  • Unit No: 5
  • Level: Undergraduate/College
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Table of Content

Organization Selected : Williams Performance Tenders


Management accounting is considered accounting for managers. It is a key prospect that assists managers in forming business structures according to organizational goals and objectives. Management accounting reports and methods which are used in management reporting elaborated in context to “Williams Performance Tenders” which is a boat manufacturer. Management accounting system and requirement of kind of management accounting system explained. Critical evaluation of MA systems and management reporting done and integration defined in this report. Cost aspects and types of techniques to calculate profit and loss for a period (Bradbard, Alvis, and Morris, 2014). Application of management accounting techniques and their effectiveness evaluated in the form of financial reporting. The meaning of planning and different type of planning tools to assist the process of planning also illustrated subject-to-case scenarios. Evaluation of planning tools to respond the financial and lead Williams Performance Tenders to sustainable development discussed in this report. The utilization of management accounting in different organizations to resolve financial hitches is also defined in this context.

Management accounting and the essential requirement of different types of management accounting

Management Accounting

Accounting for management is a terminology of analyzing the cost, operations, internal financial reports, records, and accounts aids to managers. This also contains effective information which is mainly associated with defining the decision-making process and achieving the goals and targets of the company (Christ and Burritt, 2017). There are different sorts of business exchanges, occasions, and occurrences that occur in everyday business activities. Lawful chronicle and maintenance structure help in dealing with these data in vital and successful way. Administration bookkeeping is one of the critical angle as far as overseeing tasks and divisions of achieve the coveted results of association.

Management accounting contains top-to-bottom learning and ideas with respect to viable activity and administration of business. Gathering important data, information and sources to make powerful administration arrangements and procedures are the primary components considered in this report. There are separate standards and controls made as far as recording the exchanges as money-related, budgetary, non-monetary, patent rights, contracts, and assertions are recorded in compelling way with the goal that appropriate assessment and revaluation settled on for viable basic leadership designs. It is a tool to gather essential information and details regarding the management homework help and operations in effective and efficient manner.

The board bookkeeping framework is a device to assemble basic data and insights about the administration and activities in powerful and productive way. Sort of the board bookkeeping frameworks are utilized in hierarchical settings which combine and abridge the data for powerful basic leadership and assessment. It is imperative for association to comprehend the mind-boggling business circumstances and situations for better development and improvement of business. There are kind of the board bookkeeping frameworks are utilized in authoritative settings which are characterized as follows:

It is important for organisation to understand the complex business situations and scenarios for better growth and development of business. There are type of management accounting systems are used in organisational context which are defined as follows:

Management information system: This system provides computer-based information and details which plays vital role in decision making and strategic planning. There are type of information remain associated with critical analysis and summarisation to attain the desired objectives and aim of business (Christopher, 2016). This accounting system is a composition of software programs and data base which used to record the complex and essential information regarding business operations and functions. SAP ERP, SAP HANA, Odoo, SAGE and Dloibarr are some MIS systems which are widely used by organisations to boost and explore the management reporting and recording process.

Inventory management system: Management and regulator of inventories and units in stocks or in work in progress are recognised in this accounting system. This system mainly used by managers and accountants which are aligned with production and manufacturing business. There are type of transactions and activities happens in manufacturing organisation such as purchase of inventories, sale of production units. It become difficult for managers and accountants to manage the order level and management of finished goods products. Inventory management system provides a path to track the details and stock level for further production requirement. Various inventory management methods as Economic Order Quantity (EOQ), ABC system are used under this system which are used by managers as per their feasibility. Williams Performance Tenders would be able to organise and manage the inventory level by implementing this management accounting system. This accounting system helps to control the excess usage of raw material and stock and improve the quality of products and services. Proper evaluation and control prevent the shortage of inventories, theft and misuse of inventories. It wind up troublesome for supervisors and bookkeepers to deal with the request level and the executives of completed merchandise items. Stock administration framework gives a way to follow the subtleties and stock dimension for further creation necessity. Different stock administration strategies as Economic Order Quantity (EOQ), ABC framework are utilized under this framework which are utilized by administrators according to their possibility. Williams Performance Tenders would have the capacity to sort out and deal with the stock dimension by actualizing this administration bookkeeping framework.

Job costing system: This is a system which mainly associated with combining and consolidating management informations form different job centers and sections. In large manufacturing and production organisations which deals in multiple products use this management information system. It provides an complete over view of cost implemented on particular job section and centre. There is a systematic order is followed in terms of determining the cost at per cost centre and analyse the overheads to each job centre.

Price optimisation system: This is a mathematical analysis approach which helps to determine the price of new products and services. Determination of price mainly depends upon different channels and cost centres. Customer perception and mindset plays vital role in terms of deciding the price of products and services. Price optimisation contains operating cost, historic cost, inventories and sales etc. it helps to optimise the price for different sector organisation as retail, banking, casinos, hotels car rental services and the cruise lines and insurance organisations. This mainly remains centralised around compressing the cost at various cost centres and consolidating the essential information in more effective and single format.

Cost accounting system Cost bookkeeping framework: Cost bookkeeping is the primary part of the board bookkeeping that determines the techniques and plans toward compacting the expense and improving the gainfulness of association. Type of costing methods and techniques are used to analyse the cost and the profitability. Job costing system, process costing, standard costing are the type of costing techniques used in this system. Cost accounting helps to incur the cost with in business to improve the quality and productivity of goods and services. Sort of costing strategies and methods are utilized to break down the expense and the benefit. Employment costing framework, process costing, standard costing are the kind of costing strategies utilized in this framework. Cost bookkeeping causes the expense with in business to enhance the quality and profitability of products and ventures.

Different methods use for management accounting reporting

Management accounting reporting

Reporting is a process of collecting the valuable and essential information in a single format and produce a summarised report subject to performance, growth and development of organisational structure. Management reporting is a format which helps managers and accountants to record the information and details in a systematic manner so that it could be stored for making effective strategies and plans. Management accounting reporting plays vital role in terms of managing the information and details for small scale industries. Williams Performance Tenders is a boat manufacturer company which is a small scale manufacturing company, Management accounting reporting will be beneficial to record the essential information for better understanding and the planning (D'Onza, Grec and Allegrini, 2016). A proper management reporting structure may lead the organisation towards the desired designation and control. Accounting reports are utilized ordinarily with a specific end of focuses to explore every one of the additions and misfortunes of the organizations inside a traverse of time.

Management reporting considered as an art of preparing the financial information, aligning them in a single forma and summarise them parallel to management decisions and growth. This is perceived in a most reasonable and in addition compelling detailing system for taking a powerful choices for meeting future benefits or pick up for the organizations. This will be helpful in wording to evaluate exhibit position of firms for making future arranging and speculation. For the most part it is distinguish for increasing upper hands over another association or venture contenders. administration help in driving inside exercises in a most solid way by utilizing definite and also precise data of firms. Recognizable proof of important information reports which is prepared by utilizing different information through various sources considered in management accounting reports. All imperative data or information can be traded to their distinctive organizations for knowing a money related position of the business.

There are type of management accounting reporting methods are used by organisation and Williams Performance Tenders can use them for better and effective management reporting.

Job cost reports: This is the reports which helps to summarise the cost of production and manufacturing. This is one of the crucial task in terms of managing the operations and small job section in systematic manner. This is a critical process which contains related to cost and revenues perspective. It helps to identify the cost to start the particular job and calculate the overall cost incurred to complete the job. There is a proper record of cost retained by manager. This helps to track and control the overall cost and determining the time duration of cost. An expected time duration and cost is defined in terms of managing the cost reports considered in this reporting method.

Inventory management reports: These are the reports which mainly associated with analysing the inventory management reports for effective production forecasting. Williams Performance Tenders will be able to determine the stock level of manufactured boats in systematic manner. This not only helps to determine the requirement of stock for manufacturing the desired units and the stock for maintain the sales level. With the use of this reporting method managers be able to identify the production time and cost incurred at single unit in a specific time duration.

Performance reports: These are the reports which mainly helps to identify the performance and progress of task and project assigned to managers and leaders of organisations. Budgeted spending plan inside the period is fundamentally in view of real costs inside concealed for a upcoming years. In the event that this little undertaking was considerably finished the move inside previous year and also couldn't discover ways to deal with trim cost. Directors and in addition proprietors can likewise use this performance spending plan may require to improve more elevated amount of exactness (Granlund, 2011). Basically, this accounting report are predominantly useful to dismember the genuine association position in term of different association. There is a proper evaluation done in terms of managing the reports and consolidating them in a single format

Account receivable reports: Management of debtors is the key aspect for business organisations which mainly associated with analyse the total amount to be collected from debtors after a particular time duration. This also helps to determine the grace period and the average collection period from debtors. This reporting method mainly assist organisers to identify the key elements regarding preparing credit policy. There are mainly three type of credit policies are made for tracking the debtors as 30 days, 60 days and 90 days credit policy. Time duration of credit policies are given as per the credibility and recovery time of individual debtor. If debotors are unable to make payment of their debts then organization have to make strict policies of credit.

The benefits of management accounting systems and their application within association

MIS system: It can be installed by purchasing legally licensed system software from authenticated source. It is beneficial to resolve complex business situations and summarise the large information in a single format.

Price optimisation system: There are software companies which prepare software package to cover and handle the complex business complexion. This provides a tool to consolidate the price of different product line.

Job cost system: It remains beneficial for covering the cost of different sections and stores and helps to make cost plans and strategies in systematic manner (Henri, Boiral and Roy, 2016).

Inventory management system: this management accounting system mainly helps to control the inventory levels and managing the financial information at next level. It reduce the wastage level and enhances the proper utilisation of units.

Integration of management accounting system and management accounting reporting

Management accounting systems and management accounting both remain integrated with each other and assist the planning process for better execution of task and projects. The administration accounting framework merges essential data and points of interest and reveals strategies joins them to settle on a sensible conclusion for basic leadership and improvement designs. Management accounting revealing and bookkeeping framework basically connected with each investigating the money related data as far as estimating the future and make successful administration procedures (Jacobs and Cuganesan, 2014).

Cost calculation by using marginal and absorption costing system

Cost is the main aspect in terms of analysing the profitability and profit margin upon products and services. Cost is the fundamental component which remain the piece of the business tasks and capacities. Kind of cost remain related to execute the capacity and business process. Cost is known as a thought made by the association as far as satisfy venture necessity and points of interest for better upgrade and plan.

Fixed cost: The cost which mainly connected with settled factors and influence the plans and structure of business. This is the cost which is additionally considered as a ungovernable cost. Manufacturing plant lease, saddled and rates, intrigue, deterioration (just if there is an utilization of straight line technique) are some kind of settled cost.

Variable cost: This cost defines the variation due to change in production units and variations in variable cost. A variable cost is an expense that rises or falls in direct proportion to production volume. There is only direct cost is considered while calculating the profitability of business. Direct labour, direct expenses and direct labour are the type of cost considered in variable cost. This is the cost which essentially connected with the creation units. This cost principally connected with dissecting the cost by variety in per generation and incremental in minor units. This cost shift according to the change in per unit by change in settled costs. Variable cost get change and influenced because of varieties underway volume.

Semi-variable cost: This is the cost which remains stable at certain level and get change after a particular period. This is also considered as a semi fixed cost (Johnson, 2013). For example Williams Performance Tenders bears a fixed construction cost of manufacturing boat units and the cost remain stable till production of 50 units and above production of 50 units the cost increased by 10%.

Marginal costing: This is the cost which defines the relation between the change in production units to changes in cost. Average cost remain constant to marginal cost or equivalent to average cost. This helps to determine the amount of cost to be incurred in production and manufacturing units. This contains only those cost which affect the management decisions and associated with production and manufacturing process. This costing also plays vital role in decision-making process. Marginal costing also considered as a period costing. variable cost is considered as the product cost while the fixed cost is deemed as a period cost, which incurs during the period, irrespective of the level of activity. 

Absorption costing: This is the costing framework which fundamentally connected with figures the expense of inventories by thinking about generally cost inside the association. This help to consolidate generally speaking expense while figuring benefit and misfortune for the association. Assimilation costing contains fabricating costs that are consumed by the units delivered. The cost of finished units in inventories which contains direct material, direct labour and both variable and fixed manufacturing overhead are considered in costing while calculating profitability of organisation. The expense of completed units in inventories which contains coordinate material, coordinate work and both variable and settled assembling overhead are considered in costing while at the same time computing benefit of association.

Break-Even analysis: It is an analysis which defines the point of stability at which revenues of organisation become equal to expenses. Production management assignment writing, management accountants and total variable and fixed costs are compared with sales revenues for determining the levels of sale volume and production at which business makes profit and loss for a specific duration. 

Margin of safety: this indicates towards the difference between the actual sales and the budgeted sales volume (Zopiatis, Constanti and Theocharous, 2014). This mainly helps to calculate the margin of stock need to be retained by the organization to avoid a shortage of inventories and stock. It is calculated by the following formula;

The margin of safety = Actual or budgeted sales - Sales required to break even 

Range of management accounting techniques and produce appropriate financial reporting document

There are major two costing techniques are used to evaluate the printability of organization which are as follows:

Marginal costing: This costing technique is used subject to cost classification as variable cost (Direct material, direct labour and direct expenses). This provides accurate production cost and helps to determine the production cost per unit (Klychova, Faskhutdinova and Sadrieva, 2014).

Absorption costing: This provides an overall analysis of cost while calculating profit and loss. This reduce the profitability of organisation because production overheard and fixed expenses are considered in this costing system.

Financial reports that accurately applied and interpret data for a range of business

There is a profit calculation done by using marginal and absorption costing techniques. Costing techniques helps to resolve the conflicts and issues occurs in functions and operations (Trucco, 2015). The evaluation shows following results in terms of profitability as £17500 from marginal costing and £15675 by absorption costing.

Advantages and disadvantage of different type of planning tools used for budgetary control

Budgetary control is a process which contains effective use of financial and non-financial information which remain associated with financial forecast and financial planning. Forecasting information making plans, making budgetary reports are some major aspects considered in this process (Riisgaard and Gibbon,2014). Type of planning tools are used by organisations to assist forecasting process which are defined as follows;

Forecasting tool: This is one of the essential tool which helps to forecast the sales and revenue graph of business. It is calculated with the help of computer software which helps to shape the figures in graphical form and provides decision making information (Mistry, Sharma and Low, 2014).

Advantages: This provides appropriate information and tools subject to analyse the

Future forecasting for sales and revenues.

Disadvantages: Forecasted mainly based upon past scenarios and outcomes which do not provides clear information and overview of future transactions. There is a lack of relevant information and aspect found in this planning tool.

Contingency tool: This helps to correlate and consolidate the information in terms of bifurcating the contingent elements and factors and clarify the information in effective way.

Advantages: This provides a tool to correlate the information in better manner and develop a strong infrastructure for plans and strategies.

Disadvantages: This planning instrument includes extraordinary arranging which requires high expenses and time (Contingency planning.2018). In the event that there is no possibility in future than all the arranging will bring about vain. This instrument is unverifiable in nature.

Use of planning tools and their application for making and forecasting budgets

With a specific end goal to direct budgetary control, Williams Performance Tenders needs to utilize different arranging devices, for example, estimating, possibility and situation. Planning instrument typically utilized by all organizations whether expansive or little scale including William Performance Tenders as it incorporates assurance of a few expenses and costs incorporated into the business tasks. Possibility devices are properly connected by expansive scale organizations as this apparatus requires plentiful of cash and time. This device helps in controlling business dangers which is associated with outside and inner business exercises, a portion of these dangers are catastrophic events, strike, bolt outs and so on (Morden, 2016). Under Scenario apparatus, an entire scope of conceivable outcomes are produced by chief of the association with a specific end goal to get ready preventive measures because of which this system is trailed by extensive and medium scale associations.

Planning tools for accounting respond appropriately to solve financial problem

Williams Performance Tenders is occupied with assembling of particular electric supplies. It has been discovered that this organization is confronting different budgetary issues, for example, quality, income and so forth. To attain long terms goals of organisation it is required to handle these issues (Sánchez-Matamoros, Araujo Pinzon and Alvarez-Dardet Espejo, 2014). Organisation need to utilize few instruments like KPI. Determining instrument is utilized by this organization as it includes minimal effort and advantages Williams Performance Tenders by estimation of future costs and expenses. KPI will help this organization by deciding all the key regions which can bring about benefit which will eventually help them in handling their money related issues.

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Compare how organizations are adapting management accounting systems to respond to financial problems

Organizations are adapting management accounting systems as per their adequacy of business structure and function's need. Type of management accounting aspects are adopting by organization for developing to respond the financial problems.

KPI: Financial KPI which provides an overall analysis in terms of resolving the issues and the measurable values that demonstrates how effectively an organisation is attaining the key business objectives

Benchmarking: Past achievements and standards are used to evaluate the effectiveness of management accounting systems (Schaltegger and Csutora, 2012). This helps to set the parameters to attain organisational goals.

Comparison between the Williams Performance Tenders and Airdrie

Williams Performance Tenders


Storage cost of inventory and management was the main problem faced by company. Managers used Inventory management system to over the problem. It helps to manage the inventory level and helped organisation to save inventory cost.

Managing the information related to administration and overheads it is required to adopt MIS system which may lead organisation towards sustainable success.

Use of management accounting to respond to financial conflicts and lead toward sustainable success

Management accounting not only helps resolve the issues and conflicts related to management issues but also helps to resolve the issues related to financial management. Benchmarking, and KPI are some measurement tactics used by associations and organizations for the effective evaluation of financial issues (Springer, Berlin, and Gibbon, 2014). These remain beneficial for the sustainable growth and development of the organization.


As per mentioned report, it is summarised that accounting for management plays an essential role in inside management and decision. The meaning of and role of types of management accounting systems and meaning defined to boost of organization elaborated in this context. Management accounting reporting methods connected to management accounting systems. Importance of costing techniques inured to control budget and enhancing profitability of industry also defined in this context. It is a sum-up of planning tools which are used in budgetary control process and decision making also illustrated in business context. Usefulness of accounting terminology subject to analysing the profitability of business also defined in thi

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