What is the Role of management Accounting?

The main objective of the management is to manage the business in a systematic way following a plan, allocating responsibilities to implement the plan, organizing methods to execute the plan and also obtain efficiency.

1. Helps in Organizing: Organisation is related to the establishments of relationship among different individuals in the concern. It also includes the delegation of authority and fixing the responsibility. Management accounting is concerned with establishments of cost centers, preparation of budgets, Preparation of cost control accounts and fixing the responsibility for different functions. This all needs the intensive study of the organisational structure. In turn, Its helps to rationalise the organisational structure or efficient organisational frame work.


2. Motivating Employees: Management accounting helps the management in selecting the best alternatives of doing the things. targets are determined for the employees. They Feel motivated in achieving their targets and further, Incentives may be given for improving Performance. 


3. Helps in Co-Ordinations: Management accounting helps the management in co-coordinating the activities of the concerns. It Provides tools which are helpful in coordinating the activities of different departments. The work of coordination is done through the functional budgeting. Management accountant acts as a coordinator and reconciles the activities of different departments. thus, management accounting is a useful tool in coordinating the various operations of the business.


4. Helps in Controlling Performance: management accounting devices like standard costing and budgetary control are helpful in controlling in Controlling Performance. Fr the work is divided into different units and separate goals are set up for each unit and the  responsibility of a particular person is determine.the actual result are compared with corrective measures. Different departmental heads are associated with preparing budgets and setting up goals. The management accountant acts as a coordinating link between different department and he also monitor their performance to the top management.  


5. Helps in Decision making: The management if any concern has take certain important decisions. Whenever there is a question of staring a new business. expanding or diversifying the existing business, strategic business problems has to be faced and solved, similarly when in a particular situation, there are different alternatives as whether labour should be  replaced by machinery or not, whether selling price should be reduced or not, whether the export the items or not etc. the management accounting helps to solve the problem in decision making Process. 


6. Helps in Planning and Formulate the Polices:  Management accounting assists management in planning the activities of the business. Planning is deciding in advance what is to be done, how is to be done, who is to be done, where is to be done and by whom is to be done.... its involve Forecasting on the basic of Information, setting goal, Framing Polices. Thus, Management accounting help on this function of planning through provide Information.