Management Accounting Tools Customization
From analyzing several researches carried out in the field of management accounting systems customization, it has been revealed that modifications in the management accounting systems and it is observed to be one of the most vital management techniques that can facilitate in ensuring efficiency in use of organizational resources in the NSW retail sector (Patel and Harnett 2018). Research in this field also considers that management accounting is deemed to be among the most important management techniques that distinctly add value through regularly probing whether the resources are employed suitably for generating value for the Australian retail companies’ consumers and shareholders. The management accounting systems serve as the information systems focused on offering relevant information to managers in order to make decisions that can lead to effective performance of the Australian retail companies (Bouwens and Abernethy 2015). Such systems are observed to traditionally implement several techniques that encompass standard costing of products, budgeting along with absorption costing that can offer timely information to retail company’s managers. In such scenario, management accounting systems customization can facilitate retail organizations of NSW to attain cost control, improving and measuring productivity that ensures attainment of organizational goals.
From analyzing four selected articles on “Influence of Customization on Management Accounting System in Retail Industry in NSW” certain common themes are analyzed in these articles. The selected articles from which common themes are gathered include “The consequences of customization on management accounting system design”, “Strategy and management accounting practices alignment and its effect on organizational performance”, “The management of inventories and inventory management system in a small retail enterprise” and “Comparative analysis of management accounting practices in Australia and Japan: An empirical investigation”.
Management Accounting Tools Customization- Bouwens and Abernethy (2015) revealed that customization of the management accounting in the retail companies facilitates in improving ERP implementation projects through customization. This can be done through installation, integration, testing and new systems stabilizing that is likely to be more complex having an increased failure risk. For this reason, the management accounting tools such as ERP systems can be customized in order to align the capabilities of the accounting tools with the operational processes of the retail companies. McLellan and Sherine (2013) indicated that proper documentations of ERP customizations serves as the key in decreasing audit risks taking place in maximum retail companies. Moreover, it has also been evaluated that necessary updates on a timely basis can facilitate in easy searching and components location. In addition risks revealed in case of management systems customization in retail companies needs to be decreased through re-using several components. Such risks must be managed in recognizing and making use of common features that can increase level of standardization along with re-usability of components used in retail firms.
Management Accounting Systems Adopted by Retail Companies
Management Accounting Systems Adopted by Retail Companies- According to views presented by Patel and Harnett (2018) it is revealed that information that can be gathered through customizing themanaging accounting systems that the tools facilitate in decision making in the retail companies. It has also been revealed that the management accounting information gathered by the retail companies through customizing their accounting systems facilitates in analyzing the strategies on new product development along with facilitating in carrying out more positive performance analysis of companies along with appraising the capital expenditure projects. Wijewardena and De Zoysa (2014) revealed that customization of the management accounting in the retail companies facilitates in improving ERP implementation projects through customization. This can be done through installation, integration, testing and new systems stabilizing that is likely to bed more complex having an increased failure risk. For this reason, the management accounting tools such as ERP systems can be customized in order to align the capabilities of the accounting tools with the operational processes of the retail companies.
From analyzing the selected articles on the impact of management accounting system certain different themes have been observed in examining the impact of management accounting systems customization on the retail companies. These themes are explained under:
Concept of Customization- Bouwens and Abernethy (2015) indicated that customization pursuit is considered as retail production flexibility that is considered to be new competitive edge for these companies. It is also explained to be the extent to which business unit facilitates individual consumers to impact the product features offered by the retail organization. In contrast, McLellan and Sherine (2013) indicated that customization is conceptualized within the research as a continuum as it indicates low level of customization in which services offered by the retail companies is totally customized for being suitable to consumer requirements. Moreover, in explaining the role of customization in impacting the use of management accounting systems in retail companies, these reasechers explained customization in accounting systems to develop a develop a formal system developed for offering information to the managers. In examining the role of customization in retail management accounting systems four aspects are considered including scope, integration, aggression and timeliness. On the other hand, Patel and Harnett (2018) explained that customization in the management accounting systems in retail companies’ offers relevant information at the functional level that offers managers with vital data on all the departments. These reasechers also revealed that customizations on the management accounting systems are relied heavily on the timely dimension at the time information is provided frequently and when there is less delay between when an event takes place and at the time information regarding such event is attained by the managers.
Themes in the Impact of Management Accounting Systems Customization
Relationship between Customization and Management Accounting Systems- McLellan and Sherine (2013) elaborated that three are four dimensions of management accounting systems that are conceptually distinct. For instance, wide scope along with integrated information might be oared in an aggregated manner. The management accounting systems serve as the information systems focused on offering relevant information to managers in order to make decisions that can lead to effective performance of the Australian retail companies (Bouwens and Abernethy 2015). Such systems are observed to traditionally implement several techniques that encompass standard costing of products, budgeting along with absorption costing that can offer timely information to retail companies’ managers. In such scenario, management accounting systems customization can facilitate retail organizations of NSW to attain cost control, improving and measuring productivity that ensures attainment of organizational goals. These reasechers also indicated that the variation among such dimensions simplify signifies the relationship among the variables. The relationship between the customization and management accounting systems is carried out in two stages in a way that these factors change the decision making nature through enhancing uncertainty level. All the four articles focused on different approaches of explaining the impact of customization on management accounting systems used in retail companies. Customization of all the dimensions of managerial accounting systems facilitate in decreasing the information gap that can further result in resolution of conflicting objectives developed by retail companies in NSW.
After analyzing the four selected articles on the impact of management accounting systems customization, effective managerial implication was revealed that it has on the retail companies of NSW. Moreover, it is also evident that there are certain important aspects associated with management accounting systems that includes operating budget, improvement of standard costing system and efficiency of the operational information. This can facilitate the retail companies in recoding department expenses and revenues that encompass salaries and materials provided to employees. Customization in the management accounting systems can also support the retail companies in developing measures to control standard costs that are used to support managerial decision making trough providing anticipated product expenses. The financially asked management accounting systems used in retail organizations focus on maintaining management data on departmental performance and outputs. This includes prediction volumes, lead and delivery times, and product defects along with resource consumption control in the retail companies. Custom accounting software can facilitate the retail organization in conducting financial activities smoothly through managing the budgets of the retail company products and offer relevant information to investors or owners. The management accounting systems serve as the information systems focused on offering relevant information to managers in order to make decisions that can lead to effective performance of the Australian retail companies.
Despite having several managerial implications, the research on this field is observed to have certain limitations those are needed to be addressed in the future study. From analyzing the four selected articles it has been gathered that the implications of accounting systems customization did not focus on analyzing the implementation of accounting systems in improving complexity of retail companies business (McLellan and Sherine 2013). The future research will focus on analyzing the role of enterprise accounting software in the retail company’s workflow management and business planning. The existing researches also did not focus on analyzing the development costs that is impacting the accounting software development. Considering such gap, the future research must carry out study on analyzing the use of modern custom accounting systems in retail companies in tracking financial metrics in order take their business operate efficiently.
References
Bouwens, J. and Abernethy, M.A., 2015. The consequences of customization on management accounting system design. Accounting, Organizations and Society, 25(3), pp.221-241.
McLellan, J.D. and Sherine, F.A.A., 2013. Strategy and management accounting practices alignment and its effect on organizational performance. Journal of Accounting–Business & Management, 20(1), pp.1-27.
Patel, A. and Harnett, D., 2018. The management of inventories and inventory management system in a small retail enterprise.
Wijewardena, H. and De Zoysa, A., 2014. Comparative analysis of management accounting practices in Australia and Japan: An empirical investigation.
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