Vid # 4 BUSINESS MANAGEMENT ACCOUNTING Module 2 part 2
Summary
TLDRThe video script delves into the evolution and current focus of management accounting, emphasizing its strategic role in decision-making within organizations. It highlights the importance of financial and non-financial data analysis, collaboration with other departments, and the use of technology and data analytics to enhance efficiency and accuracy. The script also traces the history of management accounting from its early 20th-century roots in internal reporting to modern practices that include cost control, budgeting, decision-making, and sustainability considerations, showcasing its vital role in guiding business strategy.
Takeaways
- 📊 The current focus of management accounting is on providing relevant, timely, and accurate information to support decision-making within an organization.
- 📈 Management accountants are playing an increasingly strategic role, guiding and shaping business strategy based on financial and non-financial data analysis.
- 🤝 Collaboration with other departments and stakeholders is essential for aligning financial and operational objectives.
- 💡 Leveraging technology and data analytics is crucial for improving efficiency, accuracy, and decision-making in management accounting.
- 📊 Use of advanced data analytic tools and techniques helps identify patterns and trends in financial and operational data.
- 📊 Development of dashboards and reporting tools aids management in making more informed decisions.
- 📚 The history of management accounting dates back to the early 20th century, shifting focus from external reporting to internal management reporting.
- 🛠️ The rise of mass production led to the development of new techniques for internal reporting, which became known as management accounting.
- 📈 In the 1920s, pioneers like Henry Gantt and Lawrence Deport developed post-accounting techniques to control costs and improve profitability.
- 📊 The 1930s and 1940s saw a focus on budgeting and planning, with the development of techniques such as standard costing and variance analysis.
- 📈 The 1950s and 1960s marked a shift towards decision-making, with the introduction of break-even analysis and cost-volume-profit analysis.
- 🌐 The 1970s and 1980s incorporated non-financial information into management accounting, leading to techniques like activity-based costing and the balanced scorecard.
- 🌳 The 1990s to 2000s saw the evolution of management accounting with a focus on globalization, digitalization, and sustainability, introducing techniques like target costing and life-cycle costing.
Q & A
What is the current focus of management accounting?
-The current focus of management accounting is on providing relevant, timely, and accurate information to support decision-making within an organization. It plays a strategic role by guiding and shaping overall business strategy based on financial and non-financial data analysis.
How does management accounting involve collaboration with other departments?
-Management accounting involves working collaboratively with other departments and stakeholders within the organization to ensure that financial and operational objectives are aligned.
What role does technology play in management accounting today?
-Technology plays a significant role in management accounting by leveraging data analytics to improve efficiency, accuracy, and decision-making. It involves the use of advanced data analytic tools and techniques to identify patterns and trends in financial and operational data.
What are some tools and techniques used in management accounting to support decision-making?
-Tools and techniques such as dashboards, reporting tools, break-even analysis, cost-volume-profit analysis, and activity-based costing are used to support decision-making in management accounting.
How has management accounting evolved since the early 20th century?
-Management accounting has evolved from primarily focusing on external financial reporting to internal management reporting, with the rise of mass production. It has incorporated new techniques and methods for internal reporting and has expanded to include non-financial information and a holistic view of operations.
What was the impact of mass production on the development of management accounting?
-The rise of mass production in the early 20th century led to a need for managers to have more information about the cost and profitability of their operations, which led to the development of new techniques and methods for internal management reporting.
Who were some pioneers in the development of management accounting techniques?
-Pioneers such as Henry Gantt and Lawrence Deport began to develop post-accounting techniques to help managers control costs and improve profitability by measuring and managing costs at the departmental and product levels.
What was the focus of management accounting in the 1930s and 1940s?
-In the 1930s and 1940s, management accounting became more focused on budgeting and planning, with the development of new techniques such as standard costing and variance analysis.
How did management accounting techniques evolve in the 1950s and 1960s?
-In the 1950s and 1960s, management accounting began to focus more on decision-making, with the development of techniques such as break-even analysis and cost-volume-profit analysis to help managers make decisions about pricing, product mix, and capital investments.
What new techniques emerged in the 1970s and 1980s to incorporate non-financial information in management accounting?
-In the 1970s and 1980s, new techniques such as activity-based costing and the balanced scorecard emerged to incorporate non-financial information like quality and customer satisfaction into management accounting analysis.
How has globalization, digitalization, and sustainability influenced management accounting in recent years?
-Globalization, digitalization, and sustainability have influenced management accounting by making techniques such as target costing and life cycle costing more prevalent, as managers seek to balance financial performance with environmental and social responsibility.
Outlines
📊 Strategic Role of Management Accounting
This paragraph outlines the current focus of management accounting, emphasizing the provision of timely, accurate, and relevant information to support decision-making within an organization. It highlights the strategic role of management accountants in shaping business strategy through financial and non-financial data analysis. The importance of collaboration with other departments and stakeholders is underscored to align financial and operational objectives. Additionally, the paragraph discusses the increasing reliance on technology and data analytics to enhance efficiency, accuracy, and decision-making, mentioning the use of advanced tools and dashboards for informed decision-making.
🔍 Evolution of Management Accounting
The second paragraph delves into the history of management accounting, tracing its origins to the early 20th century when the focus shifted from external financial reporting to internal management reporting. It discusses the impact of mass production on the need for cost and profitability information, leading to the development of management accounting techniques. Pioneers like Henry Gantt and Lawrence Dart developed post-accounting techniques for cost control and profitability improvement. The paragraph also covers the evolution of management accounting through the 1930s and 1940s with a focus on budgeting, planning, and new techniques such as standard costing and variance analysis. The 1950s and 1960s saw a shift towards decision-making with the introduction of break-even analysis and cost-volume-profit analysis.
🌐 Modern Developments in Management Accounting
The final paragraph discusses the incorporation of non-financial information into management accounting during the 1970s and 1980s, leading to the development of techniques like activity-based costing and the balanced scorecard. It emphasizes the move towards a more holistic view of operations. The 1990s and 2000s saw further evolution with the rise of globalization, digitalization, and sustainability, introducing techniques such as target costing and life-cycle costing. The paragraph concludes by reiterating the essential role of management accounting in providing a framework for cost management, performance evaluation, and strategic decision-making to help organizations achieve their goals.
Mindmap
Keywords
💡Management Accounting
💡Relevant Information
💡Strategic Role
💡Financial Data Analysis
💡Collaboration
💡Technology
💡Data Analytics
💡Operational Objectives
💡History of Management Accounting
💡Break-Even Analysis
💡Globalization
Highlights
Current focus of management accounting is on providing relevant, timely, and accurate information to support decision-making within an organization.
Management accountants are increasingly playing a strategic role in organizations, helping to guide and shape overall business strategy based on financial and non-financial data analysis.
Collaboration with other departments and stakeholders is essential to ensure that financial and operational objectives are aligned.
Management accounting is leveraging technology and data analytics to improve efficiency, accuracy, and decision-making.
Advanced data analytic tools and techniques are used to identify patterns and trends in financial and operational data.
Dashboards and other reporting tools are developed to help management make more informed decisions.
Data is the basis for decision-making in management accounting, supported by data analytics tools and technology.
The history of management accounting dates back to the early 20th century, shifting focus from external financial reporting to internal management reporting.
Mass production in the early 20th century led to a need for more information about cost and profitability, resulting in the development of management accounting techniques.
In the 1920s, pioneers like Henry Gantt and Lawrence Dart developed post-accounting techniques to help managers control costs and improve profitability.
Management accounting in the 1930s and 1940s focused on budgeting and planning, with the development of standard costing and variance analysis.
The 1950s and 1960s saw management accounting focusing more on decision-making, with the introduction of break-even analysis and cost-volume-profit analysis.
In the 1970s and 1980s, management accounting began to incorporate non-financial information like quality and customer satisfaction.
Activity-based costing and the balanced scorecard were developed to provide managers with a more holistic view of operations.
From the 1990s to 2000s, management accounting evolved with globalization, digitalization, and sustainability, introducing techniques like target costing and life-cycle costing.
Management accounting continues to be an essential tool for managers to make informed decisions, providing a framework for measuring and managing costs, evaluating performance, and informing strategic decision-making.
Transcripts
foreign
focus of management accounting the
current focus of management accounting
is on providing relevant timely and
accurate information to support decision
making within an organization management
accountants are increasingly playing a
strategic role in organizations
helping to guide and shape overall
business strategy based on financial and
non-financial data analysis so I need a
financial data
financial data to come up with an
analysis
this involves working or collaboratively
collaboratively
this involves working collabor
collaboratively with other departments
so this involves working
collaboratively with other departments
and stakeholders within the organization
to ensure that financial and operational
objectives are aligned directions
thanks
bear with me in addition management
accounting or
management accounting is also
increasingly focused on leveraging
technology and data analytics to improve
efficiency accuracy and decision making
this involves the use of advanced data
analytic tools and techniques to
identify patterns and Trends in
financial and operational data as well
as the development of dashboards and
other reporting tools to help management
make more informed decisions uh
opinion based on experience opinion will
improved
more focused
management accounting you have to have
data as basis of your decision and then
maraming
data analytics tools and other
technology technology that will provide
data to come up with the decision
three
times
business management
[Music]
so the history of management accounting
foreign
so the history of management accounting
dates back to the early 20th century
when the focus of accounting shifted
from external financial reporting to
internal management reporting prior to
this accounting was primarily used to
report financial information to external
stakeholders such as investors and
creditors
financial information
external stakeholders the manga
investors and creditors and government
regulatory bodies
makers
the rise of mass production in the early
20th century led to a need for managers
to have more information about the cost
and profitability of their operations
this led to the development of new
techniques and methods for internal
management reporting which would
eventually become known as management
accounting so management accounting is
more of internal reporting
and financial accounting external
reporting again
management accounting because
mass production
so that is
uh
[Music]
mass production in process
[Music]
in town
in the 1920s Pioneers such as Henry
metals and Lawrence Deport began to
develop
post-accounting techniques to help
managers control post control costs and
improve profitability they focus on
measuring and managing costs at the
departmental and product levels which
provided managers with greater
visibility into their operation in 1930s
and 1940s management accounting became
more focused on budgeting and planning
the rise of scientific management and
the need for more precise in planning
and control led to the development of
new techniques such as standard sourcing
and variance analysis so as a standard
posting palette
must produce products
and environment foreign
in the 1950s and 1960s management
accounting began to focus more on
decision making this period saw the
development of techniques such as
break-even analysis and cost volume
profit analysis which help managers make
decisions about pricing product mix and
capital capital Investments
analysis and cost volume profit analysis
so you break even
up to what point in production more uh
equals
Break Even analysis
and how much is
[Music]
before I was living in the world
he reminded me of a business management
break-even analysis
Break Even analysis
so when we come to Costco volume profit
analysis
foreign
and
um in the business okay in 1970s and
1980s management accounting began to
incorporate non-financial information
such as quality and customer
satisfaction into its analysis this led
to the development of new techniques
such as activity-based costing and
balance scorecard which provided
managers with a more holistic view in
their operations
so in the 1990s until
2 000
management accounting continued to
evolve with the rise of globalization
digitalization and sustainability
techniques
such as techniques such as Target
Crossing and life cycle Crossing became
more prevalent as managers sought to
balance financial performance with
environmental and social responsibility
the day manager management accounting
continues to be an essential tool for
managers to make informed decisions
about their operations it provides a
framework for measuring and managing
costs evaluating performance and
informing strategic decision making
which help organizations
achieve their goals and objectives
researchers
[Music]
businesses
decision making in English
database available uh
and then
Targets on their performance
management accounting
commitments
required
needs services
so we will go to the next module
later on for now
with the history of
business management accounting
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