IntroductionModern business environment is increasing competitively and dynamically. This has increased concerns for developing a reliable system of management accounting. Managerial accounting has a responsibility that concerns provision and use of accounting information to managers within the organizations as argued by Smith, (2007 p. 76). There are various strategies laid down to effectively advance the role of the management accountants as strategic partners in the organization and develop business practices concerning decision making. According to Chadwick (1998 p. 106), management accountants contributes in issues concerning risk management, this involves designing framework program to identify, measure, manage, and report risks to the achievement of the organization.
The manager applies professional knowledge and skill in the preparation and presentation of financial and other decision oriented information in a way that will assist the organizations management to formulate policies, plan and control of the operation of the under taking (Hopwood, 2008 p. 7). As argued by Ward (1992 p. 28-9), there business benefits that comes with integrated business strategies along with other management accounting tools, firms needs to identify kind of business they are operating in.
essentially identify products or services, type of customers, geographical markets and delivery channels. It is important for management to match the strategic business unit with the some of the related business unit strategy. A strategic business unit is normally a departmental organ that has distinct external market for product and services that are different from other SBU. An example of this can be a property agency, the property sales line on the Lamma Island is one specific SBU, which differs from those of the property line sales from the urban distinct village (Botten, 2007 p. 47-9). Basing on the arguments made by Botten (2007 p. 55), business strategy is aimed on how well it will compete successfully in the market.
It remains important that the company should focus on the specific strategy, this can easily be identified if clear measures concerning cost, efficiency, profit returns on the invested venture, risks of the venture among many other elements, involved in the chosen strategy. The management target has to be aimed at elevating the company above the breaking even cost level. Collier (2003 p. 12) notes that the company can achieve all these through inclusive and extensive consultation advice, derived from efficient experts support involvement in the strategy lay out.
This ensures that the firm can comfortably settle its expenses effectively and spare part of its capital returns for growth development and sustainable create a vibrate business. While working on developing and monitoring business strategies for a profitable results, more emphasis should be placed on relative levels and trends in real costs, prices, volume in production, the market share, cash flow and stewardship of the available resources in the venture business (George, 2009 p. 301). It is important that managers objectively point out strategies that add certain perspective value to traditional management accounting, this is required to extend the role of accounting into different directions, and the system should be designed in manner that aligns costs with strategies.
Involve assertions in fair and general way compare and analyze the cost structure of competitors while monitoring changes over a given time in achieving the management can come up with distinct approaches involving company’s cost product that is perceived to give value to the customers(Drury, 2007 p. 201).