contribution of SAP to management accounting

Contribution of SAP to Management Accounting

Management accounting is one of the core functions of business. A lot of business focus on increasing their revenues, but fail to understand or manage their costs properly. As such, effective use of management accounting techniques is critical to the success of any business, moreover as business grow larger, some organization might need a presence of software that could help the operation of management accounting. ERP SAP is one of software that could optimize managerial accounting functionality to controls cost, helps manage profits, and provides critical information to managers so they can make informed decisions.

System Application and Product (SAP) ERP is the world’s most complete enterprise resource planning (ERP) solution. It can provide your organization with the strategic insight and flexibility by improving and innovating cost accounting processes, SAP ERP Financials enables you to:

•Collect overhead, direct, and indirect costs at the event level

•Assign costs to cost structures in a clear, traceable manner

•Follow a best-practice, structured approach to cost assignments from overhead management down to the product or market segment

•Drill down into supporting events and documents from high-level, operational results

•Analyze profitability by product, market, customer, service, or channel segment

•Work from the same set of numbers for both financial and managerial accounting

•Hold managers at all levels in the organization accountable for efficient and effective use of resources

With this software, a firm can use the methodology best suited for the industry to reduce the cost of good sold or operating costs, makes administrative tasks easier to accomplish, increase production and process efficiency, maximize customer profitability, and improve inventory visibility. Building on a solid foundation of  best practices, SAP delivers transparent, drillable, and accurate cost-accounting information, ensuring that managers  have the relevant cost information they need to improve performance.

In conclusion, many firms use software nowadays to optimize the operation of management accounting and to minimize human error on the information. That's why SAP is quite helpful to management accounting, considering that those informations are important to make a decisions for a firm.

Garrison R.H, Brewer P.C., Noreen E.W., Cheng N.S., Yuen K.C.K. (2012). Managerial Accounting : An Asian Perspective. New York: McGrawHill

SAP AG. (2005).http://www.sap.com/solutions/business-suite/erp/financials/pdf/BWP_Best_Practice_Managerial_Accounting.pdf