How Accounting Information Assist Management in Measuring Efficiency and Effectiveness
User Rating: 0 / 5
- Details
- Hits: 4147
How Accounting Information Assist Management in Measuring Efficiency and Effectiveness
Businesses venture to make maximum profits from their activities as regular as possible using minimal resources and through improved efficiency. Companies must track financial records to ascertain its productivity and comparing revenue and expenditures to determine the effectiveness (Drury, 2013). The management focuses on accounting data to relate income and costs to detect any anomalies or any adjustments and track the development of products and revenues of the company (Kihn, 2010). Managers focus on getting jobs done in their organizations at a minimal cost or within budget limits to achieve the desired results.
Accounting information furnishes managers with relevant information to inform their financial decision and give them knowledge of the performance of their institution (Atkinson, & Kaplan, 2015). It is through the report from the books that will enable managers ascertain if they are doing well and make comparisons to determine if they are on the right track in terms of meeting their financial goals. Managers will be informed in the manner in which they need to execute business events through the maintained inventory of the information process (Soudani, 2012). Management can monitor the operation process by learning the results of production volumes and quantity of sales through integration.
Accounting information primarily informs the managers to design appropriate operation and information operations that would see their company make adjustments (Biddle, Hilary, & Verdi, 2009). The information will aid the management in performing internal controls that will reduce waste if detected, or stop processes that are not beneficial and improve on internal dynamics. Accounting information provides managers with cost data that is used to determine the appropriateness of the planning and control measures. By having the necessary information, that supports comparisons, company productiveness, and performance measured (Zairi, 2012).