Sustainability of businesses implies that the business is able to survive the various macro and micro factors and is able to undertake business. It is the primary aim of a company that it will continue the business forever and hence, all the business strategies are developed with this mindset. With the globalization of the world economy, the market has become smaller and smaller with increased competition and newer substitutes which creates it difficult for businesses to thrive and survive.
Management Accounting is the process of collecting, analyzing and interpreting the business information to get some useful insights for the management. It acts as a tool that aids the management in the decision-making process. The processed information is made available only to the management of the organization and it is not made publicly available. The information helps the management in taking some important decisions by looking at the financial and accounting aspects of the business (Emmanuel, C., Otley, D. and Merchant, K. 1995).
The role of Managerial accounting has evolved over the years. In the past, the managerial accountants were just mere staff employees whose role was concerned with providing reports and information. But with the passage of time, managerial accountants have gained in importance in the process of decision-making; they are now working in the role of business consultants and work in various departments alongside the departmental heads, helping them out with all the possibilities of any operational problems (Abernethy, M. A. and Lillis, A. M. 1995).
Managerial Accounting is concerned with providing the valuable business information to the management so that they can carefully weigh all the options in the decision-making process. The major functions of the managerial accounting process have been identified and enumerated below:
- Assisting in the Decision making process by providing necessary valuable information.
- Contributing by helping the functional manager’s in directing and controlling operational efficiencies.
- Employee motivation and directing of the actions of the employees.
- Performance Measurement of the various departments, its managers, and all other employees of the organization.