196 Accounting comes in many different functions . Not all of them are legal and mandatory. This is the case of management accounting , also called analytical accounting. This is why a Best ERP Solution Provider in Saudi Arabia choose not to use it. Very often, we imagine that management accounting brings little added value… In order to make a more accurate calculation of the benefits of management accounting, we briefly present the three main advantages: 1. Improve enterprise cost management Analytical accounting makes it possible to better understand the costs of the company, by classifying them according to their nature. It makes it possible to detail the expenses incurred in an exhaustive manner, in order to improve control and management . Let’s take the example of a company with a high number of employees making business trips. Financial accounting, which is the only mandatory accounting, will tell us how much employees spend on business trips, in general. At most, this accounting will be able to specify how much they have spent on accommodation, transport, etc. Management accounting goes further and allows you to detail the types of expenses incurred: expenses for taxis, public transport, mileage with a personal car, etc. So, by following this hypothetical case, we might find out that taxi fares are very high. It will then be possible for us to study alternatives and solutions: Reaching an agreement with a taxi service provider Increase the use of public transport for business trips Buy service cars, motorcycles, even provide bicycles to employees Thanks to the updated and detailed information provided by management accounting, it will be possible to find relevant solutions in order to adapt the decisions, policies and actions carried out to the reality of the company and the needs of its employees . Similarly, improving cost management requires better budget control . Budget management can be monitored in detail, to detect potential problems, deviations, bad practices, unexpected costs, etc. Thus, it becomes possible to have total control of the use made of the company’s economic resources. To return to the previous example: in the event of an increase in employee travel expenses, it will be much easier to detect the origin of the increase if cost accounting is implemented (increase in taxi fares, fuel, etc). 2. Facilitate the calculation of profitability We mentioned above the improvement of the classification of expenditure thanks to cost accounting. In addition, management accounting also allows better allocation of expenses by department , by cost center, and even by customer or by project. Thus, it becomes possible to study the profitability of the work carried out and to calculate the profit margin obtained with each customer, each order, etc. You can then improve the efficiency of your business: Focus your efforts on the most profitable clients or projects Redirect activity if necessary Increase profitability with indirect cost analysis Etc. In this way, you can integrate into your analyzes departments or cost centers whose profitability is usually difficult to measure, such as the marketing or finance department. 3. Improve decision-making: knowledge is power You now have an idea of ​​the main benefits of management accounting. One of the main difficulties, in order to greatly improve your strategic decision-making, is to collect relevant and up-to-date data for your cost accounting. For this, there are expense management tools . They make it possible to provide the essential data and they carry out your management accounting plan for you. This is the case of Captio, our software which allows its users to make a fast, agile and automatic classification of a company’s travel expenses, with a view by nature, but also by department, cost center, employee, method of payment, etc. All the data can be exported, in order to be analyzed and integrated into any of your tools. Read More: ERP inventory software in Saudi Arabia 0 comment 0 FacebookTwitterPinterestEmail Uneeb Khan Uneeb Khan CEO at blogili.com. Have 4 years of experience in the websites field. Uneeb Khan is the premier and most trustworthy informer for technology, telecom, business, auto news, games review in World. previous post Just how to Pay back Rules College Financial obligation next post Top App Development Trends for the Future Related Posts Heartfelt Option for this Special Occasion: Send Rakhi... May 2, 2024 Designing a Modern & Functional Dental Practice: The... May 2, 2024 The Unfolding Essentials of Under Counter Fridge Selection May 2, 2024 Navigating Prostate Health: A Comprehensive Guide to Prostadine April 30, 2024 Changing Perspective: 7 Drawing Room Designs that Incorporate Study... April 29, 2024 Expert Audi A6 Repair in Dubai Services: Ensuring... April 29, 2024 Unraveling Excellence: Maserati Repair in Dubai April 29, 2024 Mastering Audi Q3 Repair in Dubai: Your Ultimate... April 29, 2024 Unveiling the Magic: Wedding Dress Cleaning in Dubai April 29, 2024 Investing in Lahore Commercial Real Estate: Opportunities and... April 29, 2024