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When a company decides to use a different type of system to handle company data that relates to management, it is considered a management accounting change. For some companies, this can mean switching from a paper management accounting system to a computerized accounting system. In the case of companies already using computerized systems, a management accounting change usually means a new software program designed to handle management-related data. When a company is changing systems, it is important to consider employee training and risk reduction as part of an overall plan to perform a successful management accounting change.
The definition of a management accounting change can include a change in tools or techniques used to organize and access the data needed to manage a company well. Changing accounting techniques could mean using a new method of recording or processing management data. If a management team is asked to record new types of data, the change would affect the data that helps the team make decisions.
Often, a management accounting change means a change in the software program the company uses for handling managerial data. The software used to organize the data used for managerial accounting is often called a management information system. So, a management accounting change usually means change to this system as well.
For those coordinating it, an important part of management accounting change is to minimize the negative impact of the change on the business. This usually requires a period of training for the managers affected by the management accounting change. It may also involve a transitional period during which managers have access to both the old and the new accounting systems. This way, they will be able to get accustomed to the new system, while the old system provides them quick access to familiar data systems.
Management accounting can also be called managerial accounting. It is used to organize data that helps a manager make good business decisions. In contrast with other types of accounting systems, management accounting systems are intended for use by management inside the company, and are not designed for use by outside individuals or organizations, like investors. Usually, the information on these accounting systems is confidential even to non-managerial employees of the company.
Generally, tasks like product and operating cost analysis, sales performance analysis and operating procedures are handled at the managerial level because members of the organization at the corporate level are often more focused on numerical data like profitability of the company than data related to management tasks. Information used for people outside the managerial department like stockholders, corporate leaders or company employees is often called financial accounting information.
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