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ERP'S In Managerial Accounting Capabilities Managerial Accounting Essay

¶ … ERP'S IN MANAGERIAL ACCOUNTING CAPABILITIES Managerial accounting intended provide managers information make decisions run company successfully. The information reliable, timely complete. Its provision, dictated

Effect of ERP's in managerial accounting capabilities

ERP systems are implemented to assist an organization become more efficient in the running of their business and also to integrate the different departments within the organization. The automation of the business processes ensures that a business remains competitive in today's business environment Hitt, Wu, & Zhou, 2002.

Adoption of ERP systems is also widespread because of the advancements made in the technology field. Integrating the different organization departments provides for a centralized management system, and makes it easy for reporting. Barriers that may exist between an organizations function are eliminated, thus providing managers unprecedented access to the organization accounting information.

Managerial accounting capabilities

With an ERP in place, an organization changes the way it processes, evaluates and reports its accounting information throughout the business. With seamless flow of information, an ERP makes it possible for management to get real-time information. This will assist the organization to improve it productivity as decision making will be much faster. The system will allow the organization to process its transactions more efficiently, thus reducing the reporting cycle for its accounts Gattiker & Goodhue, 2005.

This ensures information to external users is disseminated quickly. Data capturing is done once across the whole ERP system, thus there is...

With single data entry, the system ensures that there are no data capture errors and the data once entered cannot be modified thus ensuring the accuracy of the data in the system.
These systems can store large amounts of data, and this makes them good choices for managers as this data can assist them to find out the past financial situation of the company easily and facilitate for better future decisions. Having all this data in the system allows for easy searching of records, and this saves managers a great deal of time. There is also improved efficiency with the use of ERP systems as most queries can be answered from the system thus reducing the amount of time an accountant spends answering and explaining things to managers which gives them more time to concentrate on their work.

Organizations financial reporting process

Considering the tight timelines that organizations have especially during end month, the ERP system has facilitated for faster reporting because of real-time processing. Financial statements are now produced in real-time, and this has saved the accountants the hurdle of having to collect the data whenever they need to prepare these statements Krishnan, 2005.

ERP systems have changed the work of accountants making them concentrate more towards data analysis than data collection as was the previous case before adoption of ERP systems.

With managers directly accessing information from the ERP systems, there is a likelihood that…

Sources used in this document:
References

Cassia, L., Paleari, S., & Redondi, R. (2005). Management Accounting Systems and Organisational Structure. Small Business Economics, 25(4), 373-391.

Gattiker, T.F., & Goodhue, D.L. (2005). What Happens after ERP Implementation: Understanding the Impact of Interdependence and Differentiation on Plant-Level Outcomes. MIS Quarterly, 29(3), 559-585.

Hitt, L.M., Wu, D.J., & Zhou, X. (2002). Investment in Enterprise Resource Planning: Business Impact and Productivity Measures. Journal of Management Information Systems, 19(1), 71-98.

Krishnan, R. (2005). The Effect of Changes in Regulation and Competition on Firms' Demand for Accounting Information. The Accounting Review, 80(1), 269-287.
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