The purpose of existence of any enterprise is to maximize profits with minimized costs. Therefore, all types of activities in the enterprise. Even if they do not directly generate income, they are aimed at achieving this goal indirectly. Accounting and reporting carry, first of all, information and management functions, which affects the system of planning, control and cost analysis, and therefore the optimization of the financial results of the company.

Let's consider what management accounting is, for what purposes it is used, and what are the nuances of its organization in an enterprise.

What is management accounting

Management accounting is initially a part that helps keep information related to management under control. In the future, the development of this area goes beyond the scope of accounting, since accounting data for financial transactions that have already been completed and recorded in the relevant documents are insufficient for operational planning and control of business management.

For the operational management of any organization and especially for making financial decisions, it is necessary not only to have complete information, but also to receive it in a timely manner and systematically update it, that is, to streamline this process. This is precisely what the management accounting system is aimed at.

Management Accounting can be defined as a regulated system of all processes affecting the management of an organization (identification, analysis, evaluation, registration, planning, control, etc.) through the use of accounting and reporting capabilities.

REFERENCE! The result of management accounting should be such a system for obtaining information that at any time gives a complete picture regarding the following positions:

• what is the financial condition of the business;
• what means can be used to increase profits and minimize costs;
• how exactly to manage the resources available to him.

Who is management accounting information intended for?

Information, the possession of which provides opportunities for managing an organization, cannot be publicly available. Prompt decision-making that directly regulates the functioning of a business structure is available only to the management team. Therefore, the main recipients of data obtained during management accounting are:

• direct management at various levels;
• representatives of financial positions in the firm;
• some internal users.

In the vast majority of cases, management information is not intended for external counterparties of the organization (partners, creditors, investors, shareholders, etc.). Often it constitutes the concept of a trade secret and is protected from disclosure by law.

What does management accounting do?

The subject of this type of accounting is a system of data and possible forecasts. The requirements for the information that should result from such accounting are quite strict:

• adequacy– the data received by the responsible person must be sufficient to make a particular business decision;
• brevity– excessive volume complicates the process of analysis and selection of the optimal path;
• efficiency– timeliness of information is even more important than the absolute accuracy of the data (for example, if we are talking about immediate action in the event of a loss, then it is not so important whether they were 12 or 15%; it is much more important that this factor was reported on time);
• reliability– in contrast to accuracy, a prerequisite, since decisions that are fateful for the organization should not be based on false premises and erroneous data.

Choosing the optimal management accounting method

How to organize an information system is decided individually at each enterprise. Unlike financial or accounting, the law does not so strictly regulate the procedure for management analysis of business processes in an enterprise.

The methods are determined by the tasks that are set for management accounting, the main one of which is determining the cost (to reduce costs and simultaneously increase profits). To do this, you can choose from various methods those that are most suitable for the peculiarities of the functioning of a given enterprise and give the most complete picture without unnecessary interference with the work itself.

1. Finding your break-even point– “reaching zero”, after which income will begin to prevail over costs.
2. Planning various budgets– optimal distribution of various types of resources, especially financial ones.
3. Process costing– used in production cycles when the products are mostly of the same type and the result can be correlated with the operating time.
4. Custom method– calculation of project costs, it is convenient to use for one-time work, when the work does not fit into existing technological lines.
5. Transverse method– used in industries that are characterized by cycles (redistributions) of production processes, each of which can be analyzed separately.
6. Standard accounting of expenses– an approximate (normative) cost rate is established and the maximum permissible size of deviations in one direction and the other is calculated (overexpenditure, waste or savings, optimization).
7. Inventory-index accounting of expenses– analysis of inventory data at the end of the accounting period.
8. Direct costing– separation of overhead costs from production costs when determining costs.

IMPORTANT! Management accounting is not identical to accounting and financial. To complete the information, not only data on the financial position of the company is used, but also various factors not directly related to finance, which constitute only the main basis of management accounting.

Principles of management accounting

Developed based on the experience of Anglo-American and French management systems.

1. Communication skills. Only communication at all levels allows managers to obtain a systematic picture of data about the organization.
2. Relevance. Management must be provided with information that corresponds to the request, that is, the data must meet the current needs of management.
3. Analysis. It is not enough to obtain the necessary data; you need to interpret it correctly and draw conclusions, that is, translate the information into specific management decisions, as well as predict their possible consequences.
4. Confidence. Since management information is information that is closed to the general public, it is impossible to operate it without a certain level of trust and protection of the received data.

How to build management accounting

If a company, as part of improving management efficiency, wants to implement a management accounting system, it will have to go through a number of successive stages.

You will have to start by defining the basis of management data, that is, a specific financial base. In domestic companies, the primacy of management accounting is a rather rare phenomenon, so most often it has to be built on the basis of an already functioning financial accounting system. In such cases it is necessary:

• clearly state the current situation (number of reports, their information content, analytics features, efficiency of information generation, etc.);
• predict the planned organization of accounting (reports on management needs instead of standard ones, changing the system of evaluation indicators, optimizing information, operating not only with past data, but also with forecasts).

Prospects for implementation

A system that has proven its effectiveness at the business level can be successfully implemented at the state level. At the present stage of development of domestic entrepreneurship, its implementation is typical only for large organizations, especially with foreign investment. The cost and lack of development of the process of implementing management accounting sometimes scares away medium and small businesses.

However, a system that has proven its effectiveness at the business level can be successfully implemented at the state level. To do this, you need to solve a number of primary problems:

• development of a methodological basis for management accounting;
• regulation of the basic rules and norms of such accounting (by analogy with accounting and financial);
• approval of the regulatory legislative framework;
• popularization of this form of accounting for business managers and government assistance in its implementation.

The organization of management accounting is an internal matter of the organization itself. Just as there are no two identical people, there are no two identical organizations; their differences are determined by differences in forms of ownership, scale of activity, various combinations of external and internal environmental factors - all this necessitates the introduction of certain forms of accounting (both financial and management) accounting.

Maintaining management accounting, unlike maintaining financial accounting, is not mandatory for the organization. The management accounting system serves only the interests of effective management, therefore the decision on the advisability of its implementation in one form or another should be made based on an assessment of the cost-benefit ratio of its operation. In order to consider the management accounting system in an organization effective, it is necessary that it facilitates the achievement of the organization’s goals with the least cost for the organization and operation of the system itself.

The organizational structure of the management accounting system is built taking into account:
- the structure of the organization itself;
- information needs of management; -technical capabilities and features of computer
information system used in the organization;
- qualifications and personal qualities of managers and accountants-analysts.

Large and medium-sized organizations have special divisions in their organizational structure, whose tasks are to implement certain management accounting procedures (we discussed this in the previous section). Such services, operating at the level of the entire organization, can be called headquarters. In addition, in individual divisions and responsibility centers, special employees are appointed to coordinate accounting and management work both within the division and with higher levels of management.

In management theory, it is known that currently the most common are three forms of organization:
1. Unitary (linear-functional) structure with an established hierarchy of relationships and responsibilities that exists indefinitely (Fig. 3.4). This is a classic form of organizational structure, it is characterized by the strict subordination of lower-level employees to senior managers and the transfer of information and commands primarily vertically. Already at the dawn of the industrial era, production in many industries was organized according to this scheme.

The linear-functional form of organization has undoubted advantages, in particular:
- stimulates professional specialization;
- does not allow duplication of functions and responsibilities within the organization;
- improves vertical coordination in each of the functional branches.

Most manufacturing and trading companies of small and medium-sized businesses still have a linear-functional organization. However, the disadvantages of this form of organization are also significant: the lack of formal horizontal connections leads to the fact that information can reach lower levels on the “adjacent vertical” only by rising to the very top along our “functional branch.” This complicates coordination between individual functional branches, promotes conflicts of interests and goals of individual functional branches, and thereby increases the costs (financial and time) of managing such a system. Therefore, companies operating in the most technologically advanced industries or producing products for single orders (aerospace, consulting and auditing, software production), not content with such a scheme, have at least the rudiments of a matrix form of organization. In a linear-functional form of organization, in addition to accountants-analysts working directly in the structure of the accounting and financial service (in the financial vertical), economists, standard setters, administrators of workshops, departments, services (accounting and financial employees at the middle and lower levels of production, sales and other verticals).

2. A divisional (holding) structure is a group of relatively independent divisions united by common financial management and (most often) ownership relations (Fig. 3.5).


In terms of products, a holding can be a vertically integrated structure (in which the results of one division are transferred for further operations to another) or act as a fully diversified group of companies (if they produce unrelated products or sell in different markets). From the point of view of the form of organization, large companies with noticeable territorial or product disunity, which require a high level of decentralization and delegation of authority, fall into this category. The head office of the holding company is engaged in strategic planning and centralized distribution of resources, primarily financial, and also monitors the achievement of the divisions' goals, also formulated primarily in terms of profit. Companies included in the holding (divisions, divisions, segments) develop their own plans to achieve these goals and are responsible for their implementation. Thus, by delegating the authority to make operational and tactical decisions to divisions, the holding’s managers also transfer responsibility for achieving their goals to the levels of these divisions. The other side of the coin is the inevitable duplication of functions by individual departments and the conflict of interests of their managers. With a divisional (holding) form of organization, accounting and financial services are formed not only in the management company, but also in each holding company separately, and just as in a linear-functional system, in each company specialists can work as in the administration , and in departments.

3. Matrix structure, in which divisions (subsidiaries, projects, etc.) have a certain independence in carrying out their tasks. At the same time, holders of a certain profession perform their functions only on a temporary basis, for the duration of a separate project, and easily move between departments, forming a single labor market for functional groups. In matrix-form organizations, the problem of the attitude of heads of functional units and projects is particularly acute.

The principle of organizing the activities of matrix organizations at the operational level is illustrated in Fig. 3.6)