Organization of management accounting

Definition
Organizational units are used to structure business functions and for reporting. The
organizational units of Financial Accounting are used for external reporting purposes, that is,
they fulfil requirements that your business is subject to from external parties, for example, legal
regulations. The financial statements for example, are created based on the organizational units
of Financial Accounting.
Basic settings in Financial Accounting are Customizing settings that you have to make in
order to be able to carry out processes in Financial Accounting.
Use
The organizational units of Financial Accounting, such as the company code, chart of
accounts, and fiscal year are used for external reporting purposes, for example, for financial
statements legally required of your company. For detailed information about the organizational
units in Accounting, see the documentation for Accounting under Financial
Accounting Financial Accounting - General Topics Organizational Units and Basic
Settings .

The Role of Management Accounting in the Company

The role of management accountant in an organization is one of supporting roles. The
management accountant helps the people responsible for carrying out the basic goals of the
organization. The position directly responsible for the basic purpose of the organization is called
the line position. Meanwhile, a position that supports and is not directly responsible for the basic
purpose of the organization referred to as staff positions.
Line managers are people who make policies and decisions that affect production.
Through the provision and interpretation of accounting information, management accountants
can have important inputs in various policies and decisions related to cost accounting.
The controller, head of the accounting department, oversees all accounting departments.
Because of its important role in the operation of an organization, the controller is often seen as a
member of the top management team and is involved in planning, controlling and decision
making. As the head of the accounting department, the controller is responsible for accounting
needs, both internally and externally. Such responsibilities may include direct accountability to
internal audits on the definition of audits, the notion of financial accounting, the notion of cost
accounting, and taxation accounting.
Management Accounting Information System
All decision makers in the organization must understand how to create and use a good
accounting management information system. The essence of a management accounting
information system is a process that is described by activities such as collection, measurement,
storage, analysis, reporting and management of information in accordance with financial
accounting standards. Management accounting information systems are not bound by any formal
criteria that define the nature of processes, inputs, or outputs so that the criteria are flexible and
based on management objectives and cost accounting objectives.Computer technology can
enable management to track performance information that goes beyond cost-based information
from system and general ledger functions. Good management accounting involves the
responsibility of utilizing vital information across the entire value chain of activity and
throughout the life cycle of goods and services.

The Role of Management Accounting As an Accounting Type

The role of management accounting in the company as a financial information processing
system is divided into three levels of development, namely:
1. Scorers (score keeping)
In the management of the company, management records activities and controls the
implementation of the activity plan. Management accounting plays a role in providing elements
of financial statements for the preparation of an activity plan, which provides information as a
basis for allocating resources to various planned activities.
Management accounting also plays a major role in presenting feedback information to
management regarding the implementation of activity plans that have activities that have been
prepared. Management accounting records scores and communicates scores to the manager in
question to enable management to evaluate the implementation of the plans that have been
developed.To fulfill the functions to record scores for management, management accounting
must meet the requirements, including: meticulous, relevant, and reliable. The accuracy of
recording the score of each manager is an absolute requirement, because the information
presented to management will be used to evaluate their performance. Everyone who is measured
performance will care about the elements used to measure performance in accordance with the
development of accounting.
2. Management attention (attention directing)
If the management accounting function has gained the status as a good scorekeeper, the
first stage of development is as the attention of management. As management draws attention,
the scope of accounting includes information on the deviations of implementers of the plan
presented more to the attention of management so that they can formulate actions to prevent it
from continuing.
 This stage of development can only be achieved if management accounting has been able
to be a good scorekeeper. If management accounting information is unreliable in the absence of
the integrity of the management accountant who organizes it, management accountant
information can not serve as management's attention.
3. Provider information for problem solving (problem solving)
This stage of development is a further result of previously achieved developmental status,
as a scorekeeper and as an attention-grabber. If management has relied on information generated
by management accountants, then they will always invite them in every problem-solving
decision.
Not only that, management also requires accounting as accounting information to reduce
its uncertainty. If management accountant information is not available or not accurate, relevant,
and reliable, then management will turn to non-accounting management. This is done to reduce
the uncertainty. Or, if management does not understand the accounting language, so some of
those decisions will be based on non accounting information.
This management based on its decisions is not based on accounting information, its
decision quality is not rational economic. This happens as a result of the absence of an
accounting language that can be used by management to think. So that management accounting
will not be involved in decision making.

The Role of Management Accounting As a Type of Information

The role of management accounting within a company is to gather some information
containing facts, data, observations and perceptions. The function of the accounting information
system for humans is to reduce the uncertainty in decision making. Decision-making is always
about the future that contains the uncertainty and selection of an alternative action available.
Therefore, decision-makers are always trying to gather information to reduce the uncertainty it
faces in choosing alternative actions.