REVIEW
of
FINANCE -
November, 2018
55
of strongest effect to achievement of goals and
most effective use of resources. Cost accounting
also helps managers quantify the plans by
means of making budget statements including
consolidated budget and detailed budgets for
divisions, activities or products. In these budget
statements, cost information must be used since
there is no cost information there is no budget, and
it is impossible to allocate resources to implement
plans as well as there is no instrument to measure
the operation results or evaluate the achievement
of strategic goals.
Organizing:
Organizing means combining
activities and linking factors such as organization,
labour and resources to implement and achieve
a plan. When organizing a plan, managers need
frequent information of costs to seize the situation
of resource utilization for the activities of divisions,
thereby; they are able to evaluate plan progress.
Cost information helps them discover the real
inadequacies of divisions, phases or areas of
business; hence, they are able to take appropriate
and timely measures to reallocate resources
more effectively or to coordinate with internal
and external divisions more closely. Particularly,
when organizing a plan in the context of volatile
environment, managers have to conduct frequent
evaluation on the aspects of resource utilization
and operation performance under different
situations. Therefore, they need cost information
for every situation to determine the best options
in terms of costs.
Controlling:
Controlling is the process of
supervising, measuring, evaluating and adjusting
activities to ensure plan progress. On one hand,
controlling is an instrument that managers employ
to discover inadequacies and apply measures. By
controlling, on the other hand, activities will be
smoothly implemented and faced fewer risks.
Controlling is not the final step in management; it
is a continuous process in terms of time and space.
Controlling is a system responding to operation
results and forecasts as well. The response system
of results helps establish standards, estimate
outputs and adjust variation. To implement
adjustment, managers apply an adjustment
program and run it to achieve expected results.
The response system of forecasts helps monitoring
inputs and implementation process to make sure
whether they are stable and reliable, this system
also enables response to be implemented prior
to the system outputs. An effective controlling
system must be a combination of final output
control and forecast control. To maximize the
efficiency of resource utilization, costs should be
controlled by both systems in all phases of pre-
plan implementing (designing phase), during
plan implementing (input supply, production
and sale) and post-plan
implementing to draw lessons
for the next periods.
+ Controlling costs before
implementing plan (designing
phase), this phase considerably
impacts the production results
which involves selection of
materials, technology and costs
of the value chain and supply
chain. The major proportion of
costs for a product life-cycle
is determined in designing
phase. To well-manage costs
in designing phase, managers
need cost estimation for each
activity, phase or product item.
Product is the result of activities
and aggregation of consumed
costs into those activities,
DEVELOPING MANAGEMENT ACCOUNTING IN ENTERPRISES
Step 1: Determine the target of the accounting system
Step 2: Identify the nancial responsibility center
Step 3: Build classi cation system
Step 4: Set up management accounting reports
Step 5: Select solution for management accounting
Step 6: Design voucher system, account for management accounting
Step 7: Set up estimation system
Step 8: Draft "Regulations on management accounting in enterprises"
Step 9: Make organizational changes
FIGURE 1: MODE OF DEVELOPING MANAGEMENT ACCOUNTING IN ENTERPRISES
Sorce: The authors collect
