Management accounting is an important strategy in the operations of a business and could be very beneficial to Modern Cook PLC for various reasons. Firstly, both financial and non-financial operations are considered, which makes the overall business decision less biased and more focused on the success of Modern Cook PLC with the data being tailed towards their specific needs. Management accounting can also be a useful tool for examining which areas of the business may be struggling, allowing the company to instantly work on the issue instead of waiting until it is too late. Managers are able to make decisions that aim for continuous improvement and that are justifiable based on intelligent analysis of the company data, as opposed to their own feeling (Smallbusiness.chron.com 2017). For example, the company may be made aware that costs are too high, and therefore they can work through this to make sure all costs add up and there is no mistake with suppliers, or it may be that their business culture may not be the correct one for the employees to be efficient. Management must to be able to focus on adopting the right tactics and actions in order to achieve the …show more content…
This would allow Modern Cook PLC to slowly and steadily gain profits and be able to keep them up, leading to profit maximization and steady growth without the risk of overtrading. Although Modern Cook PLC would be making a loss for the first few months due to having to pay off payments made before the initial launch of the product in January, from May onwards profit would be made, allowing Modern Cook PLC to slowly increase profits and not run out of working capital. Businesses can grow faster than this, however they give up profits to achieve faster growth rates and they usually jeopardise future year’s growth plans. (Gray