Activity Based Diagram Explanation Step wise:

Fig 1: Managerial Accounting Activity Diagram (As-Is)

Managerial Accounting is not just about the financial accounting part, it comprises of overseeing the
business functionalities as well. A Management Accounting System comprises of Strategizing by use of
Technologies and keeping in account the organizational nature and structure and the ongoing External
environment. Managerial Accounting continuously keeps in check the use of resources and their
capacity to deliver by daily documentation and report building in addition to overlooking financial
activities of a firm. Fig 1 shows the activity diagram of a system where a Managerial Accounting
personnel has a basic 3-fold task to perform.

1. Cost Accounting
2. Performance Analysis through profitability
3. Integration of Technology and Risk Management.

Cost Accounting steps:

This comprises of:

1. Deciding on the product launch by analysis the external market conditions and requirements.
2. Identifying the functional attributes necessary
3. This attributes again comprises of either Sale pricing system or Historical Data enterprises.
4. A profit margin (targeted) which is already defined is compared to the actual market price of the
product after the pricing strategy and the cost is calculated.
 5. If the Production Cost is lesser the product is launched, else a cost gap analysis is done and the
product is cycled to the process improvement department.

The second functionality of Managerial Accounting is Performance Analysis,

This comprises of:

3 main children:

1. Cost Accounting Measures

2. Resource Tracking Measures
3. Physical Progress Measures

The decision is to check whether the performance is optimal and up to the mark, if yes then,

1. Review the overall Performance Assessment.

2. Build Performance Matrix
3. This information received is:
a. Used for forecasting
b. Information stored for future project change management

If the decision gives a negative, then Performance is observed and undergoes Risk Control Activities.

The other child of the entire Managerial Accounting System comprises of:

Integration of Technology and Risk Management.

1. The performance matrix report built in Performance Analysis phase is used as input and forked
into 3 child activities:
a. Resource Allocation for Technology Implementation
b. External Auditing and Report Generation
c. Training Change Management.
2. Along with Legal issues, the process is needed to be strictly standardized in the Integration
process.
3. If already integrated, then Asset and other information are generated and stored in the
warehouse again for future references. If not Integration of Finance and Management decisions
needs to be undertaken to implement ease of access of information.
Fig 2: The to-be-system for Managerial Accounting

Here the only change would be to automize the entire system by including a system that asks for login Id
of the personnel for making these decisions at the entry level as checked by the IT admin databases.

Also, when the performance matrix reports are build, they will be directly stored in the warehouse by
using a DBA login provided at the initial step and not stored as soft copies for later entries. This whole
process will be automatically done to improve and even for integration function the DBA will be able to
fetch the information from the entire system and no loss of information will take place.