How Can Management Accounting Techniques Assisst the Management of a Essay

How Can Management Accounting Techniques Assisst the Management of a Real Life Company - Essay Example Arcadia Group Limited is UK's largest privately owned clothing retailer that operates approximately 2,500 outlets. These outlets offer street’s best known fashion brands to different market segments (Arcadia Group Limited, n.d.). TopShop is mainly engaged in selling of women clothing and accessories. The company is also focusing on on-line selling of the products. This retail chain offers clothes mainly for young females. Other fashion products like shoes, accessories, make-up and gift items are also available in these outlets. TopShop was launched in 1964 to cater the growing demand for fashionable clothes among females in UK. From then onwards it turned out as a style symbol that caters the imagination of fashion icon people in UK’s retail industry. Within UK the retail chain has over 300 outlets and around 100 outlets are operating in international territories. Considering its success in the target market it is quite difficult to accept that this brand once had its b eginning in the basement of Peter Robinson department store. It took almost a decade for the brand to emerge out as a stand alone retailer. Back in 1994, TopShop got an opportunity to acquire its own identity. At that time 90,000 sq ft area was acquired at London Oxford Circus to open a unique outlet solely for TopShop. This outlet gave an identity to the retail brand; till date this outlet is world’s largest fashion store that attracts more than 200,000 shoppers per week. The brand image of the company is enough to attract international designers. The retail has a history of collaboration with some well known international designers like Celia Birtwell and Kate Moss that gave an extra edge to the brand name of TopShop. With... This paper stresses that a retail outlet sells large amount of finishes products that require regular updating of data. The sale to stock ratio is low because large portion of working capital remain engaged in inventory. As the business cycle is short in length, hence cash-flow balance is quite critical. The suppliers are always in hurry for their payments whereas the customers prefer to make delay. This report makes a conclusion that a retail outlet can confirm poor management if it encounter over crowded cash counter during festive session, the invoice process take time and customers has to wait long and inaccurate data in the invoice such as mistake in weight, item or amount. These are the signal of inadequate availability of information that can be rectified with help of management accounting system. The author says that with help of management cost accounting tools, company can generate ample reports that provide in-depth information about performance of different departments. Among these tools, activity based management is the one that has gained high popularity. Activity based management can be segregated in two distinct section; the first one is activity based costing where cost incurred at different point in the operational process is identified and then allocated to specific activity centre. The second section deals with strategic decision were management take decision about re-engineering of the activity. There are other techniques of management accounting such as cost volume profit analysis where the management calculate contribution ration that reflects profitability of the business.