MANAGERIAL

ACCOUNTING
PRESENTED BY: CARLA PIANZ S. FAMPULME
 CONTENTS

The Planning Function of the Controllership

Business Plans and Planning

Interrelationship of Plans,
Strategic Planning
Financial Impact of the Strategic Plan:

Long Range Financial Plan

Profit Planning: The Annual Plan

Related Cases

2022
Company
BUSINESS PLANS AND PLANNING:

INTERRELATIONSHIP OF PLANS,
STRATEGIC PLANNING
BUSINESS PLANNING

The process whereby an organization’s leaders figure out the best

roadmap for growth and document their plan for success.

A plan, accordingly, must recognize three factors:

1. It must involve the future.

2. It must involve action.
3. It should give recognition to the organizational structure of

responsibility, authority, and accountability by which action takes

place in a given business.

 Time as Related to Planning Lead time for product

development

Length of life of the

product

Planning Period:
Market development time

How Long Is
Development time for raw

materials and components

“Long Range”?
Time for construction of

physical facilities

Payout period for capital

investment
SYSTEM OF PLANS

Stemming from the strategic

operations plan it outlines the

At the summit or vertex is the

plan is the corporate

tasks of each employee that will

strategic plan. It seeks to outline in

development plan that

need to carry out to accomplish

general terms the characteristics

concerns itself with the

the goals laid out in the
and objectives of the firm
development of “new” products
strategic plan.
and markets
BASIC ELEMENTS IN ANY PLAN

Establishment of definite

Statement of purpose time schedules and

adherence thereto

Specification of the
Identification of action to

resources to be used be taken

Identification of goals Identification of

conditions to be met or

assumptions made
PLANNING

PROCESS
 ROLE OF THE CONTROLLER

prepare the analysis

Determining the
Selecting company long-

and present
Developing strategies
corporate mission range objectives
recommendations
FINANCIAL IMPACT OF

THE STRATEGIC PLAN:

Long-Range
Financial Plan
 Long-range planning typically spans a 5-10 year

LONG RANGE
period.

FINANCIAL PLAN involves projecting revenues, expenses, and key factors

that have a financial impact on the organization.

CAPITAL

INVESTMENTS
the money used by a business to purchase
fixed assets, such as land, machinery, or
buildings. The money may be in the form of
cash, assets, or loans.
 FACTORS AFFECTING CAPITAL

BUDGETING DECISIONS

Cash flow budget Fiscal policy and legal

Opportunities out of the

mandates technological changes

Rate of return Competitor strategies Market forecast

RISK ANALYSIS

Competitive response
Capital cost overruns.
Nationalization of facilities.
Ecological costs
Sales fluctuations.
Raw material scarcity
Deterioration of margins.
Technological advances
 ROLE OF THE CONTROLLER

Provide financial-type
Consolidate all plans in
Evaluate or appraise the
Measure dividend policy.
data, together with
financial terms, by year
strategic plans as an
Evaluate the plan and
requested analyses, to
or other appropriate
overall management
Finally, assuming the

the other executives

time segment (two years,
device and judge the
plan will be met each

involved in developing
or quarters, in some
planned financial
year
the plan. instances) for the
condition.
planning period.
Profit Planning:
Annual Plan

the process of developing detailed plans for a

specified near-term period in the future and

integrating these plans into a comprehensive

whole.
PURPOSE OF BUDGETING PLANNING BENEFITS
To base action on thorough investigation and research.
Directly in the planning,
To enlist the assistance of the entire organization in

in the coordinating phase, and determining the most profitable course.

in the control To serve as a declaration of policies.
To define objectives.
To stabilize employment.
To make more effective use of physical equipment.
COORDINATION BENEFITS
• To coordinate and correlate human effort within the

business structure

• To relate the activities of the business to the expected

general trend of business conditions

• To direct capital and effort into the most profitable

channels by means of a balanced and unified program

• To reveal weakness in organization

CONTROL BENEFITS
• To control specific operations or expenditures

• To prevent waste
SUPPORTIVE

FINANCIAL

STATEMENTS AND

BUDGETS
Statement of planned income and expense
Statement of planned sources and uses of cash (or

statement of planned cash flows)

Statement of planned financial position

these detailed plans that become budgets or

standards on final approval of the ff:

Operational Budgets
Capital Assets Budget (including commitments)
Cash Budget
Other Working Capital Budgets
Other Long-Term Budgets
 ROLE OF THE CONTROLLER

Designate in detail the data

Provide the format in which
Consolidate the financial
Review and analyze all

to be supplied by the
the data should be
statements to determine
segments of the plan for

departmental or function
presented the overall company
completeness, reliability,

executive, through

picture: earnings, cash,
and reasonableness
appropriate channels, to
Set forth the time schedule
capital expenditures,

the controller of the due date for the

financial position, and so
Evaluate the plan, and the

relevant segment or phase

forth important segments by

of the annual plan reference to certain

measures.
THANK YOU
FOR YOUR ATTENTION

Reference: Controllership_ The Work of the Managerial Accountant,

Eighth Edition