To make management accounting reports are very necessary for all the interested parties of business. But most important to management who has to take best decision relating to investment, future planning and future budgets. So, accounting department has to take one more step after showing financial results in the form of financial statements.
Following are the main steps of making management accounting reports.
1. Fix the Aim of Preparing Management Accounting Report
There are lots of types of management accounting reports. Every report is not useful in every time. For example, company is struggling the shortage of cash in current time. At that time, budget report is most suitable for this. In this report, account manager can show the expenses budget and cash budget and also analysis of cash flow statement. So, to fix the aim of management accounting report is necessary for preparing it.
2. To Make Financial Statement Analysis Report
One of great report is financial statement analysis report. This report is made on the basis of analysis of financial statement. This report is used for large number of decisions like decisions for best future amount of investment in fixed assets and in current assets. We also show whether we need more fund of such investment or not. Whether we have the fund for operation or not. For this, we have to compare current balance sheet and income statements with previous year. So, we can find the flow of our new investment and profitability. So, this will help to report for future decisions.
3. To Make Trend Analysis Report
In this report, we collect the 10 or 5 years or 12 months one item of financial statement. It may be sale or account receivable balance. Now, we check its trend whether its raising or decreasing. On this basis analysis report is written.
4. To Make Ratio Analysis Report
In ratio analysis report, we first calculate the ratios. Ratios may be profitability ratio, long term solvency ratio or ratios for find the current position. So, as per our need, we can find all or any accounting ratio. Now, analysis process will start. In end, we will write the report. In this report, we recommend, whether specific decision should take or not on this report. It is just equal the test report of physical body. We take the test of Hemoglobin, we will have its standard. So, if report shows, in the body, there is less hemoglobin than standard, we start to give medicine or suggest more good diet for increase low level of hemoglobin in the blood. Same way, we see, our current assets in current ratio is very less, we can suggest company manager to do anything for increasing the level of current assets. Like this, different ratio analysis test reports will help for more best decisions of business.
5. To Make Fund Flow Analysis Report
Fund is the life blood of company. After analysis fund flow statement analysis, its report should be written and should submit for managers' review. All the benefits of fund flow analysis will be possible if we submit its report at proper time to manager who will review it proper time and will better decisions.
Following are the main steps of making management accounting reports.
1. Fix the Aim of Preparing Management Accounting Report
There are lots of types of management accounting reports. Every report is not useful in every time. For example, company is struggling the shortage of cash in current time. At that time, budget report is most suitable for this. In this report, account manager can show the expenses budget and cash budget and also analysis of cash flow statement. So, to fix the aim of management accounting report is necessary for preparing it.
2. To Make Financial Statement Analysis Report
One of great report is financial statement analysis report. This report is made on the basis of analysis of financial statement. This report is used for large number of decisions like decisions for best future amount of investment in fixed assets and in current assets. We also show whether we need more fund of such investment or not. Whether we have the fund for operation or not. For this, we have to compare current balance sheet and income statements with previous year. So, we can find the flow of our new investment and profitability. So, this will help to report for future decisions.
3. To Make Trend Analysis Report
In this report, we collect the 10 or 5 years or 12 months one item of financial statement. It may be sale or account receivable balance. Now, we check its trend whether its raising or decreasing. On this basis analysis report is written.
4. To Make Ratio Analysis Report
In ratio analysis report, we first calculate the ratios. Ratios may be profitability ratio, long term solvency ratio or ratios for find the current position. So, as per our need, we can find all or any accounting ratio. Now, analysis process will start. In end, we will write the report. In this report, we recommend, whether specific decision should take or not on this report. It is just equal the test report of physical body. We take the test of Hemoglobin, we will have its standard. So, if report shows, in the body, there is less hemoglobin than standard, we start to give medicine or suggest more good diet for increase low level of hemoglobin in the blood. Same way, we see, our current assets in current ratio is very less, we can suggest company manager to do anything for increasing the level of current assets. Like this, different ratio analysis test reports will help for more best decisions of business.
5. To Make Fund Flow Analysis Report
Fund is the life blood of company. After analysis fund flow statement analysis, its report should be written and should submit for managers' review. All the benefits of fund flow analysis will be possible if we submit its report at proper time to manager who will review it proper time and will better decisions.
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