Main benefits or advantages of management accounting can be expressed as follows:
1. Focus On Future
Management accounting always focuses on the future of the business . It provides information and guides the top level management in planning and policy making process of the firm. So it is future oriented and progressive type of system.
2. Decision Making
Management accounting helps to take both short-term and long-term business decisions. It provides up-to-date information to make suitable decisions. So, management accounting ensures the effectiveness of decision making.
3. Optimum Use Of Resources
Management accounting helps to ensure optimum utilization of resources by collecting the information and reporting to the top level management.
4. Effective Control
Management accounting compares actual performance of the business with the standards and budgeted targets. It help to check variations and take appropriate step to make controlling system more effective.
5. Performance Evaluation
Management accounting helps to evaluate the performance of different divisions, units, departments and centers of the company by measuring their performance and reporting the data and information to the owner.
Also Read:
Also Read:
6. Coordination
Management accounting helps to maintain proper coordination between different units, departments, divisions and employees in order to achieve the goals of the business firm.
7. Flexibility
Flexibility is another key benefit of management accounting. It can be prepared or practiced any time when required by the management.
8. Improves Efficiency
Management accounting helps to improve the efficiency of the firm by eliminating wastage in production process. It helps to improve employees' efficiency by motivating them and maintaining higher degree of morale.
