Finance is the lifeblood of any organisation. The various activities that an organisation engages in have financial implications and tend to either consume finance or generates finance in the form of profits. Further, the usage of financial concepts is not limited only to the sphere of business but also extends to personal life where managing personal finance and ensuring that adequate investing and budgeting skills are required (Petty et. al., 2015). In the wake of this, it is imperative to critically analyse the learning deriving through the eight units thus far and how this learning could be potentially useful for career and alter my behaviour. The current journal aims to present an overview of this learning and how it has altered my perspectives both in my personal and professional life.
Learning and Impact
The various units tend to focus on different aspects of organisational finance and provide immense knowledge with high utility. Unit 1 tends to focus on the importance of finance which is pivotal and enabled me to understand the priorities of business. This would be immensely useful in my future career as well since it is imperative to view input and output in financial terms. Besides, the unit also highlights the various stakeholders and their varied information needs. This has altered my perspective since I was unaware of the existence of host of stakeholders besides shareholders. The unit also explains the difference between management accounting and financial accounting which would be immensely useful in my future career as this sheds light on the information needs of the internal and external stakeholders and hence I would be in a better position to satisfy their respective needs.
The subsequent units i.e. 2,3,4 shed light on the various financial statements with regards to any business or organisational. These units have had a tremendous influence on my perspective since I thought that only the income statement would matter since it reflects the profits generated. However, through these units, I understood that at times the income may not be translated into cash and therefore it is imperative to view all the three statements together rather than in silos. This would also be immensely useful in my career as while analysing the company, I would take into consideration all the three statements and use tools such as ratio analysis which presents a more holistic take on the actual performance. Moreover, various issues such as efficiency, liquidity (both short term and long term) can be uncovered using ratio analysis and this would be immensely useful both professionally and personally (Drury, 2008).
Unit 5 focuses on the concept and scope of management accounting which was an eye opener. It changed my perspective with regards to the amount of decisions that need to be taken with regards to a business and the amount of information needs. This would enhance my performance going ahead particularly if I work as a management accountant since I would be able to furnish the requisite information in a manner that aids the decision making from the management perspective. Unit 6 focuses on the concept and importance of budgeting along with highlighting the various approaches to this task. Further, this unit also introduces the concept of variance analysis and explains its significance and implementation. This unit would enable my performance in my career since now I understand the importance of budgeting and could also use it as a potent tool for strategic analysis using variance analysis. Besides, this would also enhance my performance with regards to managing my own expense as I have started using the technique of budgeting to identify the wasteful expenditure which in the long run would provide stability to my personal finances. The concept of variance analysis is so pervasive that it has broadened my purview as this concept has wide applications in both professional and personal life (Bhimani et. al, 2008).
Unit 7 introduces the concept of cost management with specific focus on the fixed cost and variable cost. Further, it also introduces the concept of marginal costing and highlights not only its importance and usage. This unit altered my perspective with regards to nature of costs as inherently I assumed that all costs are variable. Although, it is a straight forward concept that certain costs do not change with volume but it never occurred to me unless it was taught in this unit. This would be extremely useful in my career as critical decisions with regards to production, costing and pricing requires that marginal costing be done. For instance, for usage of ideal capacity, the only incremental costs would be variable costs and hence the quote needs to be extended taking only variable costs into consideration and not the fixed cost (Seal, Garrison & Noreen, 2012).
Unit 8 extends the learning of Unit 7 to be used in calculation of breakeven analysis which is a very significant concept. Gaining a through underlying of the concept and its application would be immensely helpful in my career considering the popularity of break-even analysis. Additionally, the basic concept driving breakeven analysis could also be used for making personal decisions with regards to accepting or declining offers of commercial nature (Petty et. al., 2015). Further, the graphical interpretation is immensely helpful tool as it provides a fair idea with regards to the breakeven volume required that can be of immense utility in new businesses (Bhimani et. al, 2008).
Based on the above discussion, it may be concluded that the various units of the current module have introduced various aspects of management accounting and finance in a logical sequence. Most of the concepts introduced in the class have allowed me to expand my perspective and clarify various misconceptions that I had. Additionally, these have contributed immensely to the enhancement of my knowledge base. On the back of knowledge gained from these units, my career would be immensely benefitted since the basic understanding of various financial techniques and statements has enhanced. Also, various tools gave been taught which would enable me to derive meaningful information from the available data. Further, the benefits of this learning would not be limited to my professional life only but would extend to my personal life as well.
Bhimani, A, Horngren, CT, Datar, SM & Foster, G 2008, Management and Cost Accounting 4th eds., Prentice Hall/Financial Times, Harlow
Drury, C 2008, Management and Cost Accounting, 7th eds., Thomson Learning, London
Petty, JW, Titman, S, Keown, AJ, Martin, P, Martin JD & Burrow, M 2015, Financial Management: Principles and Applications, 6th eds., Pearson Australia, Sydney
Seal, WB, Garrison, RH & Noreen, EW 2012, Management Accounting, 4th eds., McGraw -Hill Higher Education, Maidenhead