Contemporary management accountants record and analyse their company's financial information using software tools. Adhering to local, state and federal guidelines, they prepare financial reports, analyse financial information, plan and budget, and perform cost accounting activities. Formerly, they used paper-based methods. Accounting professionals use software-based income statements, balance sheets and cash-flow statements and identify key ratios used to analyse performance in terms of capital management, profitability and operating efficiency.
Accountants prepare budgets, analyse actual amounts with the project amounts and help managers interpret the results to make adjustments to business operations. Accountants prepare comparative financial statements and produce other reports. They use two contemporary techniques for budgeting, known as zero-based budgeting and incremental budgeting. Incremental budgets use the actual expenditure of the previous year, with adjustments for inflation, as the budget for the current year. In a zero-based budget, accountants do not use previous values to estimate future expenditures. For example, contemporary accountants use spreadsheets on computers to create budgets.
Cost Accounting Techniques
Accountants keep track of costs and expenses using cost accounting techniques. They calculate the cost of finished goods, establish the value of the company inventory and perform other calculations to direct business activities. The Financial Accounting Standards Board makes the accounting rules of the United States. Generally Accepted Accounting Principles, also known as GAAP, are the minimum standards and guidelines for financial accounting and reporting. The American Institute of Certified Public Accountants provides resources, information and advice on software to help accountants in their work. For example, contemporary accountants use complex software packages, such as SAP, QuickBooks or GnuCash, instead of paper-based ledgers.
Asset Management Techniques
To perform asset management, contemporary management accountants identify long-term assets, establish petty cash accounts, create and maintain an accounts receivable subsidiary ledger using software applications. They calculate sales and purchases discounts and depreciation as well as reconcile bank statements. Using this information, accountants acquire and dispose of property and equipment to benefit the company. For example, most organisations want to optimise the remaining life of equipment based on reliability and potential service costs. No company wants to spend money on facilities or tools that don't provide a return on investment. Contemporary accountants use asset management software, such as HP Asset Manager or Altiris software, to manage assets effectively.
Contemporary management accountants typically analyse financial statements, such as the income statement and balance sheet of a company, to evaluate performance and evaluate the impact of changes in accounting methods and operating procedures. Using spreadsheets or accounting software instead of paper, accountants prepare charts and graphs used by managers to analyse the financial status of the business. To make accurate decisions, contemporary management accounting methods incorporate business data into the accounting management systems to allow financial decision makers to see additional criteria before making choices.