Decision making is defined as the selection of a course of action from among

alternatives. It helps the management in decision-making. It uses accounting

data to solve various management problems.

Management accounting techniques like cost-volume-profit analysis, standard

costing, budgetary control, capital budgeting, funds flow analysis, etc. Assist
the management in arriving at the correct decision.

4. Motivating
Motivation means individuals need, desires, and concepts that cause him
or her to act in a particular manner. Delegation serves as a motivation
device because it increases the job satisfaction of employees and encourages
them to look forward.

By setting goals, planning the best and economic courses of action, and also
by measuring the performances of the employees, it tries to increase their
efficiency and, ultimately, motivate the organization as a whole.

5. Controlling
Management accounting helps management in controlling the
performance of the organization. Actual performance is compared with
operating plans, standards, and budgets, and deviations are reported to the
management so that corrective measures may be taken.

6. Coordinating Operations
It helps the management in controlling the performance of the organization.

Actual performance is compared with operating plans, standards, and

budgets, and deviations are reported to the management so that corrective
measures may be taken.

7. Reporting
One of the primary objectives of management accounting is to keep the
management fully informed about the latest positions of the concern. The
facilitates management to take proper and timely decisions.

The object of management accounting is to provide data. It presents the

different alternative plans before the management in a comparative manner.
The performance of various departments is also regularly communicated to
the top management.

8. Help in Organizing
Organizing is the process of allocating and arranging human and nonhuman
resources so that plans can be carried out successfully.

Tools or Techniques of Management

Accounting
Management Accountant applies many of the financial and cost accounting
systems, as techniques, to assist the management. Management accounting is
concerned with accounting information that is useful to management.
Management accounting, like accounting, as an accounting service to
management through its .various functions, has to employ several tools,
techniques, and methods. Now one technique can satisfy managerial needs.

These are placed here in brief to have some idea about those.

1. Financial Planning
A business requires finance. Financial planning involves determining both
long-term and short-term financing objectives of the firm. Every firm has to
decide on the sources of raising funds.

The funds can be raised either through the issue of share capital or through
raising loans. Again a decision is to be taken about the type of capital, equity
share capital, or preference share capital.
When it decides to raise funds through loans, management is to decide the
extent of borrowing, long-term, or short term. All these decisions are
important for financing planning.

2. Budgetary Control
There are a number of the device which help in controlling. The most widely
used device for management control is “Budget.”

Budgetary control is a system that resorts to budget as a means of planning

and controlling and coordinating different types of activities, like the
production and distribution of goods and services as designed.

3. Marginal Costing
Marginal costing is helpful for the measurement of profitability of different
lines of production. This technique helps in identifying the nature of costs like
marginal costs (variable) and fixed costs.

This is a method of costing which is concerned with changes in costs resulting

from changes in the volume of production.