MANAGEMENT ACCOUNTING: OUTBACK MINING LTD (OML), AUS SPORTS & COOL COOKING TOOLS LTD
Question 1: Information to management
1. Description of information required by Murphy for running the business effectively
In the context of introducing new products within the existing product line, certain tools are required that helps in implementing successful marketing strategies easily. Murphy, the owner of Ski Equipment store is looking for the product expansion by introducing fishing and camping requirements. Murphy must focus on inventory management, cash flow and customer response rates for attaining a competitive advantage over others. Seasonal trends in sales seen in the SKI equipment business further hamper the sustainability of the Ski equipment business. The synopsis containing details of the essential requirements for smooth running of the business can be jotted down as follows:
In this segment, the performance analysis of the suppliers is reviewed so that improvement in terms of service quality can be done easily. According to Fleisher and Bensoussan (2015, p. 14), discount rates and the rebates provided by the suppliers are to be checked with the competitors. Briefly, improvement in service quality after scrutinising the requirements of the customers based on the ranking is done in supplier management. As opined by Goetsch and Davis (2014, p. 25), indicators measuring supplier performance in terms of quality ensures a smooth running of the business.
Collection customer feedback:
Measurement based on key performance indicators like customer response, customer satisfaction, problem-solving process adopted by the organisation helps in ensuring long terms consistency of the business. According to Patassini (2017, p. 21), retention of the customers and complaints resolution methods are necessary for successful business.
In this segment, reports on monthly inventory statements for all the product line are to be kept so that detailed analysis showing the trends of inventory helps in assessing the response of the customers for the SKI products.
Reports on monthly sales reports and the profitability statements for each product lines help in comparing the sales and profit trends for the past years (DRURY, 2013, p.49). Future profit estimation becomes easier for Murphy.
Cost-benefit analysis of the Ski products helps in identifying the areas where cost reduction is to be done. According to Patassini (2017, p. 21), cost reduction strategy helps in keeping the products cost much lower and convenient for the customers.
Murphy can use all the above-mentioned tools for ensuring long-term sustainability of the products.
2. Synopsis of duties of accountants in organisation
Accountants ponder over both financial and non-financial information and provide assistance to the management of value creation process. Accountants look after the financial stability of the business. The performance of the organisation and makes detailed trend analysis with the financial statements of the competitors includes in the duty list of the accountants. The main duty of the accountant is to ensure accuracy and transparency in financial statements. According to Coussement et al. (2015, p. 8403), deteriorating quality and the trend for seasonal sales are hampering the growth of the business.
In this segment, the accountant must identify the loopholes that are causing quality deterioration for the products. Accountants must further assess the opportunities that are available to Murphy for expanding the product line.
Therefore, the statement showing that accountants look after the financial side of the business is not true. The advice in respect of performance appraisal falls within the duty list of the accountants.
According to Stubbs and Higgins (2014, p.1068), financial management of data refers to an accumulation of financial statements used for assessing the financial performance of data. In this segment, the accountants not only check the accuracy of the financial statements but also prepare plans for a control mechanism that are required for maintaining long-term consistency in the business.
Therefore, the duties of accountants are to identify the area that requires improvement. Identification of key performance appraisal techniques includes the identification of areas where improvement can be proved beneficial for Murphy.
Framework for planning the strategies for improving the performance of the business lies in the hands of the accountants. As opined by Martínez‐Ferrero et al. (2015, p. 45), the establishment of a profitable framework for the business after rescheduling the capital structure acts as the benefactor for the long-term success of the business.
A detailed assessment of the duties of the accountant's shows that accountants not only looks at the financial aspects of the business but also looks after the non-financial information required for ensuring future success of the business. Therefore, the statement is not true.
3. Actions taken for running the business more effectively
Murphy, the Ski business owner needs to adopt certain actions that can act as the catalyst for success in the business. The recommended actions to be taken by Murphy for the betterment of the business can be jotted down as under:
1. Preparation of detailed reports on budgets (both monthly and annually) helps in ensuring consistency of the business.
2. Preparation of performance indicators list helps in assisting the business towards attaining a competitive advantage over others.
3. Training modules for enhancing the productivity of the employees helps in establishing a stable relationship with the customers.
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