Reference no: EM132449605 , Length: word count :- 300

Discussion : Importance of Managerial Accounting

1) Discuss the importance of managerial accounting as "decision-making tool" in your organization.

 Importance of Managerial Accounting

• Managerial accounting helps the organizations to prevent the misuse of business assets and give the best platform towards the maximum utilisation of the business resources. Every business faces the issues and concerns related to the utilisation of the limited business resources, managerial accounting not only utilise the business resources optimally but also take the best strategic decisions to prevent the uncertain business incidents. To make an effective strategic business decisions, managerial accounting is the best tool at every level of management in the organizations (Fitsum, 2012).

• Business owners and managers in the highly competitive business age, facing concerns and huge challenges regarding the decision making and how to take the best decisions for the business in order to minimise the uncertain incidents. Managerial accounting uses the information including past and present and take the decisions based on the current requirements of the business. The primary agenda of every business is increase the overall profitability to gain the competitive benefits and utilise all the effective decision making tool towards the profit maximisation. To increase the overall profit margins inside the organizations, managerial accounting is helpful specially to take the best decisions for the organizations (Breuer, 2013). Managerial accounting helps the organizations in following ways:

1. Gives relevant cost analysis methods
2. Activity based cost analysis techniques
3. Make or buy analysis
4. Utilise the data and other valuable business assets

• Managerial accounting provides the accurate information to the decision makers so that they can take the best business decisions and increased the overall business revenues by end of the day. Most of the decision makers use this strategies inside the business so that they can implement the effective strategies for the business and stay focused towards the profit maximisation. Managerial accounting use the information to produce the reports that provides the ongoing insights into the business and take the best decisions for the organizations