Iycee Charles de Gaulle Summary Managerial stakeholders as opposed to external stakeholders.

Managerial stakeholders as opposed to external stakeholders.

Managerial
accounting, also known as management accounting, includes many topics found in
cost accounting. Management accounting involves preparing and providing timely
financial and statistical information to business managers so that they can
make day-to-day and short-term managerial decisions. It is important to
maintain solid, professional accounting practices for the growth of a business.
Management accounting is different than financial accounting because managerial
accounting is used for internal stakeholders as opposed to external
stakeholders. The information provided in management accounting is given to the
managers of a company so they can make financial decisions for the company.

            Accounting for agriculture, farming,
and rural business is an area that requires expertise and an understanding of
the industry. People in an Ag Business career path will need to be able to
report and give advice for a company or farms financial well being. They
conduct strenuous record keeping and oversee management accounts, company
budgeting, and the administration of accounting tasks. There is an agricultural
accounting program for people interested in agricultural accounting. Students
in this concentration discover how to apply accounting principles in
production, processing, or retailing sectors of the agriculture and food
industry.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

            “Farming is unique. There are few
other types of business that rely on living produce, whether it’s crops or
livestock. That makes farm accounting more complex than other businesses when
it comes to assets, liabilities, costs and revenue” (Xero, 2017). Properly
managed agricultural land shouldn’t depreciate; possibly even go up in value.
The cost of maintaining your land should always be accounted for. Farming is a
critical field. If a country didn’t have the resources to feed itself, it would
have to rely on imports.

            Even if farmers hire an accountant,
it is important that the accountant and the farmer work together to access the
figures to help your account run more efficiently. Records are an aid to
managerial control. With the help of records, a farmer can keep a close check
on whether work on his farm is going according to his plans. This can tell him
if he is using too much feed or seeds. It can also detect whether livestock yields
are falling or rising.

            There are many good reasons for
keeping farm accounts. It permits the farmer to find out the size of the
income, which is derived from the farm. Money can be saved for investments to
improve the farm. Farm accounts also help you know the total value of the farm
business and to know who owns each part of the land. Keeping farm accounts is
the only way to reveal the weak spots in the farm’s business and show where and
how to improve management to have a larger income. (Gietema, 2006)

            In management accounts, opening and
closing values of livestock and crops in store are usually based on market
value rather than cost of production. The output from each harvest is recorded
separately in management accounts. “Management accounts for a farm include;
enterprise, crop enterprise output, adjustment for disposal of the previous
year’s crops, opening and closing valuation, rearing livestock enterprise
output, breeding livestock enterprise output, breeding livestock enterprise
output, breeding livestock stock appreciation, herd depreciation, output from
home grown fodder crops grown for sale, output from tillage and forage, output
from non-agricultural diversification enterprises, separable diversified
activities, miscellaneous revenue, single payment, and total farm output” (Department
for the Environment, Food and Rural Affairs, 2010, p. 11-13).

            It is important for managers in the
farming industry to know what is happening in their business because farmers
are the backbone of this nation. They provide food for everyone in the world.
It is essential that farming industries are aware of their managerial accounts
so they can get the correct amount of seed, feed, and other necessities for the
farm without spending more than necessary. Accounting on a farm is also
necessary to provide management with an idea of how much to pay farmers and
truckers who are working for their company.

            To obtain higher income, farmers
must have exact knowledge about present and potential gross income and
operating costs. The best way to obtain information on present results is to
keep records and accounts. Diagnosis of management problems is the pro
requisite of sound planning. Records and accounts provide the basic information
needed for a diagnosis. It helps to acquire business habits, which can help in
taking advantage of changes in the economic environment. The farmer gets a
better insight into the working of his business, which helps in finding out the
defects which can be set right by exercising better control and effecting
economies. Farmers can avoid mistakes and losses, which would otherwise result
to dependence only on his memory for guidance. Properly kept records and
accounts are authentic records with the help of which the lending agencies can
sanction the loans easily. Research requires precise and correct data, which is
possible only if proper records and accounts are maintained on the farms. The
farmers need to continuously feed the facts for state and national farm
policies such as land policies, price policies, and crop insurance. (Economics
of Natural Resources & Farm Management, 2015)

            Overall, management accounting ensures
that all managers within a company know how money is being spent and the
overall financial aspects of the company. It is different than financial
accounting because financial accounts are used for entities outside of the
organization. Management accounting is important for people in farming because
it allows farm owners and managers of the farm to know how much of a profit
they are going to have as well as how much seed, grain, feed, and etc. they are
going to need. Management accounting allows the needed financial information to
be available whenever needed.

            People in Ag Business will need to
be able to know how to read managerial accounts and provide that information to
anyone within the business. Farming is unique in the fact that there are very
few jobs that provide food and resources to everyone in the world. It is
important to keep records of all accounts that happen within a farming industry
to ensure that all products are being recorded and accurate information is
being provided to internal users. Keeping farm accounts is the only way to
reveal weak spots in a farm’s growth. In management accounts, opening and
closing values of livestock and crops in store are usually based on market
value rather than cost of production. To obtain higher income, farmers must
have exact knowledge about present and potential gross income and operating
costs. By keeping management accounts, the farmer gets a better insight into
the working of his business, which helps in finding out the defects which can
be set right by exercising better control and effecting economies. These
management accounts allow businesses the opportunity for growth that they would
not have if they just used financial accounts.