Managerial Accounting, Applied to Successful Project Accounting Practices

1218 Words3 Pages
bulb-icon

Recommended: Contemporary role of managerial accounting

Managerial Accounting, Applied to Successful Project Management Accounting Practices 1.1 Introduction to Managerial Accounting in Project Work Environments This paper provides research and pertinent Managerial Accounting strategies that support the overall financial goals of project management professionals within the context of project management work environments. Many industries rely on project management as an important part of a successful business strategy. Project managers are under extreme pressure to plan and respond effectively within the context of a fast-paced project environment where the budget has the potential of changing multiple times. Within this context, it is the project manager’s goal to not only maintain control over the budget, but also plan, execute and control schedules, scope, risk and quality. There is also a growing emphasis on a project based work environment for today’s management accountant. The emphasis on project-based work creates a growing need to integrate managerial accounting analysis into the project environment. This also means that there is an increased need for managerial accountants to develop a familiarity with the unique requirements and demands associated with the project work environment (Liberatore, Stout, & Robbins Jr., 2007). Project Accounting is the managerial accounting practice of creating financial reports specifically designed to track the financial progress of projects; assisting project managers and senior management in making appropriate financial decisions. Project managers come from a wide range of backgrounds and often begin their careers as specialists in their chosen profession; gradually moving into project management roles. Considering many p... ... middle of paper ... ...Retrieved from: http://eds.b.ebscohost.com.ezproxy.chadronstatelibrary.com/ehost/pdfviewer/pdfviewer?sid=7b6117cb-2310-4880-865e-d384f1f12271%40sessionmgr113&vid=9&hid=101 Touran, A. (2010). Probabilistic Approach for Budgeting in Portfolio of Projects. Journal Of Construction Engineering & Management, 136(3), 361-366. doi:10.1061/(ASCE)CO.1943-7862.0000128. Retrieved from: http://eds.b.ebscohost.com.ezproxy.chadronstatelibrary.com/ehost/pdfviewer/pdfviewer?sid=7b6117cb-2310-4880-865e-d384f1f12271%40sessionmgr113&vid=11&hid=101 Wulke, R., & Kohl, B. (2004). Cost Management: Roadmap to Project Success -Supplementing Accounting Systems for Project Cost Management. Cost Engineering, 46(8), 11-13. Retrieved from: http://eds.a.ebscohost.com.ezproxy.chadronstatelibrary.com/ehost/pdfviewer/pdfviewer?sid=1dccb277-c3b2-466f-8b9f-d0549574afa8%40sessionmgr4002&vid=5&hid=4205

Show More
Related

  • Costing Models: Advantages of Using Time-driven ABC Method over The Traditional ABC Method

    2024 Words  | 5 Pages

    [2] Stout, David E., Propri, Joseph M., Implementing Time-Driven Activity-Based Costing at a Medium-Sized Electronics Company, Management Accounting Quarterly, Vol. 12, No. 3, Spring 2011.

    Read More

  • Business Case Analysis

    2011 Words  | 5 Pages

    Spokane Industries has contracted Franklin Electronics for an 18 month product development contract. Franklin Electronics is new to using project management methodologies and have not been exposed to earned value management methodologies. Even though Franklin and Spokane have worked together in the past, they have mainly used fixed price contracts with little to no stipulations. For this project Spokane Industries is requiring Franklin Electronics to use formalized project management methodologies, earned value cost schedules, and schedules for reports and meetings. Since Franklin Electronics had had no experience with earned value management, the cost accounting group was trained in the methodology in order to bid for the project. Franklin Electronics won the contract because they had the lowest price. They developed a work breakdown structure that consisted of 45 work packages with 4 of the work packages being delivered in the first 4 months. They also developed a simple status report consisting of the work packages due, budgeted cost for work scheduled, budgeted cost for work performed, actual cost for work performed, cost variance and price variance. When they deliver the first status report, the Franklin Electronics project manager is called into an emergency meeting because Spokane Industries vice president is unhappy with the progress. In this paper, we will discuss Six Sigma process improvement for tracking time and cost, recommendations on how Franklin Electronics can use project management principles to meet their goal of improving efficiency and empowering management to make better and informed decisions through the use of Earned Value Management, how an effective Earned Value Management System contributes ...

    Read More

  • Time-Phased Project Work And Project Cost Control

    1876 Words  | 4 Pages

    Time-phased project work is the basis for project cost control. Work package duration is used to develop the project network. Further, the time-phased budgets for work packages are timetabled to establish fiscal measures for each phase throughout the project. The time-phased budgets are to emulate the real cash needs of the budget, which will be used for project cost control. This information is useful to estimate cash outflows. The project manager's attention is on when the costs are to occur, when the budgeted cost is earned, and when the actual cost materializes. This information is made up to measure project schedule and cost variances (Gray & Larson, 2005). The following are typical types of costs found in a project:

    Read More

  • ASDA: The Retail Giant In The World

    1928 Words  | 4 Pages

    In Management Accounting a manager has to have knowledge on both the financial and non-financial terms of the business and operational sides of the business. Both the financial and non-financial items are reported and analyzed by the managers to come to any decision. Again, the corporate social performance is also analyzed and a report is made on that. They have to take care of the other points also, i. e, profit of the organization, the final and end users, i. e ,customers and their satisfaction levels, employees of the organization, environmental matters related to the

    Read More

  • Debenhams PLC

    2104 Words  | 5 Pages

    Management accounting in organisation is very important for decision-making and to make the business more efficient and therefore increasing its profits. Is the process of preparing accounts that can help managers to make day-to-day and short-term decisions, by providing them with accurate and timely key financial and statistical information...

    Read More

  • Essay On Managerial Accounting

    792 Words  | 2 Pages

    Management accountants use their skills to help with decisions that help a business make good decisions so they company will be valuable and in an ethical manner. They assess risk and implement strategy through planning, budgeting, and forecasting. Now managerial accounts have become critical with their analysis while managing a business. They do more than provide financial information they also have an active role in the business. Over the years managerial accountants has changed and now provide nonfinancial information. They can help a business achieve their goals. Today there is many things that is influencing how managerial accountants do their job with the emergence of e-business. They can use their knowledge to streamline the e-business (Hilton,2008). Now global competition has new challenges for managerial accounts because trade agreements can affect the way the business performs abroad. Gillet (n.d) said, “To be competitive, manufacturers must keep up

    Read More

  • Cost Allocation

    1241 Words  | 3 Pages

    To test the financial feasibility and plan acceptability, there must be information on the magnitude, and share of estimated project cost that are reimbursable. This information can be derived from cost allocation. Also where cost sharing is required in the multipurpose planning process cost allocation can be applied. Cost allocation also provides information necessary for allocating the real expenditures ensuring that the cost account are maintained in line with plan formulation and allocation principles during the subsequent c...

    Read More

  • Decision Making in Managerial Accounting

    2652 Words  | 6 Pages

    Managerial accountants need to use accounting information in seeing to it that they are able to plan, evaluate the company performance, manage risks and control the business operations in a manner that is deemed beneficial to the business as a whole (Caplan, n. d). This can be achieved through: having high standards of ethics in all situations; employing the techniques of management reports, budgetary control, and analysis of fund flows and financial statements; making prudent capital investment decisions; and maintaining continuous quality control systems.

    Read More

  • The Necessity of Budgeting in an Organization

    1396 Words  | 3 Pages

    Seal. W, Garrison. H. R, Noreen. W. E. (2009), Management Accounting, 3rd ed., Mc Graw Hill

    Read More

  • Importance Of Management Skills In Project Management

    881 Words  | 2 Pages

    In the globalized economy, Successful project managers are in much demand across many industries. Organizations strongly need experienced project managers to lead their staff to accomplish their business goals and deliver successful projects. In an increasingly complex environment, project managers need to turn into many roles and have all kinds of responsibilities at each level of management within an organization. Good project managers are not born. They need to be trained. They develop their skills through study, practise and experience. They become better project managers after they finish a successful project each time. They learn new techniques and apply them on their projects. They learn their lessons from failed projects and then improve to be better project managers in the future.

    Read More

  • Cost Accounting Case Study

    2272 Words  | 5 Pages

    The overall purpose of cost accounting is to advise top administration and the management team on the most suitable and cost effective methods and actions to employ based on cost, capability and efficiencies of a given product or service. It can be defined as the method where all the expenditures used during execution of business activities are gathered, categorized, examined and noted down (Horngren & Srikant, 2000). Once these numbers are gathered and recorded the information is used to determine a selling price and/or to identify possible investment opportunities. Although the principal aim or function of cost accounting is to help the business administration with their decision making and business planning process, the cost accounting data

    Read More

  • My Career In Project Management

    868 Words  | 2 Pages

    Over the course of my professional life, I have become increasingly involved in project management roles. Doing so has made me aware of the many varied challenges that can face projects and the project managers who are charged with bringing them through to completion. The success or failure of projects, in whatever economic, political or social field, rests not just on the quality of the project’s goals, but also on the abilities of those involved in the project – and above all those who are managing it – to bring it to successful completion. To do this, project managers need to be equipped with a very wide range of skills, many of which are unrelated to the type of project itself. So, for example, a project manager of an engineering project must not only have engineering

    Read More

  • What Is The Importance Of Project Management

    781 Words  | 2 Pages

    When planning a new project, how the project will be managed is one of the most important factors. The importance of a managers will determine the success of the project. The success of the project will be determined by how well it is managed. Project management is referred to as the discipline that entails the processes of carefully planning, organizing, controlling, and motivating the organization resources so as to foster and facilitate the achievement of specific established and desired goals and meet the specific criteria of success required in the organization (Larson, 2014). Over the course of this paper I will be discussing and analyzing the importance of project management.

    Read More

  • Cons And Limitations Of Budgeting: Limits And Limitations Of Budgeting

    1096 Words  | 3 Pages

    The budget established at the beginning of an accounting period is continually amended to reflect variances that arise due to changing circumstances on the project level. Finance with the help of the project delivery teams makes provision for reviewing the budget versus the forecast over 3 main

    Read More

  • Reflection Paper On Project Management

    1545 Words  | 4 Pages

    Project management involves all activities that encompass scheduling, planning, and controlling projects. A successful project manager ensure that an organization’s resources are being used both efficiently and effectively. Most projects need to be uniquely developed require a sense of customization and the ability to adapt to any posed challenges. The scope of effective project management includes defining what the project is and what is being expected to be accomplished. Projects are imposed to fulfill a certain need and project managers must have the ability to create the proper definition. Goals and the means used to attain those goals have to be clearly stated. Project Managers must also have the ability to plan

    Read More

More about Managerial Accounting, Applied to Successful Project Accounting Practices

Open Document