Management Accounting: The Important Roles Of Supply Chain Management In Business

Management accounting are playing a vital roles of every successful business out there, whether it is production company or you are providing customer service businesses. It a very important tool that must be in the toolkit o those that controls the affairs of a business.

Strategy Implementation

Preliminarily, a company always wanted to differentiate itself from other competitors. In order to do so, management accounting came up with a primary strategic elements which based to the factor of quality, cost and time (OCT). It actually help company evaluate the customer base and the preference or demand made by its market.

Implementing a successful strategy of company in the design and development a company operation can improve cash flow

Which the EOQ helps customized recommendations provided regarding the most economical number of units per order. EOQ also helps maintain sufficient inventory level to match customer demand, where through the EOQ analysis a company can tell how much inventory to hold, when to re- order it and how many items to order.

Supply Chain Management

Management accounting helps improves companies supply chain by using the Activity- Based Costing (ABC). It helps improves business process by determining non- valued added activities and improve better the allocation of resource in an efficient and effective manner. With a better company resources allocation, it helps company identifies wasteful products .Through ABC analysis, company had a better understanding of the utilities of overhead and helps company prevent any wasteful product and unnecessary costs. The method also helps to fix price of products or sevices that are excessive or

This approach improves company cost control system by setting standard for each type of cost incurred and then highlighting exceptions or variances. In that case it act as a warning system by alerting potential problem for management. As a result, it allows management to prepare accurate budgets and estimating costs for bidding on jobs and simultaneously a better planning and decision making . Marginal costing provides a clearer picture of the cost over benefit for both consumer and the manufacturer for the greater good in order to help costing saving for consumer and improve company profit maximizing. This approach are appreciate by many company with its simplicity of how it operate and it can combined with other approaches such as budgetary and standard costing without much difficulty. This approach also ensures that the decisions taken will yield the maximum return to the business taking consideration of the break- even chart and profits