Management Accounting Practices (MAPs) of Small and Medium-Sized Manufacturing Enterprises in the City of Tarlac

Abstract

Management accounting exists to provide financial and non-financial informational needs of the management to make informed business decisions, and consequently help attain the company’s goals and objectives. This study described the management accounting practices (MAPs) of small and medium–sized manufacturing enterprises in the City of Tarlac. Relevant data were gathered through questionnaire and substantiated with interviews. Data revealed that majority of the 22 listed MAPs were adopted by the respondents. Using the viewpoint of Sino-Japanese Management Accounting, most SMEs had evolved to Stage 2 -Traditional MAPs with focus on product costing, variances and cost control. Likewise the most frequently used MAP was Standard Costing, under Stage 2 which was imperative to the SMEs that were mostly engaged in the manufacture of foods and beverages. Multiple Regression, NPV Analysis and Zero-based Budgeting were the least adopted and never used MAPs. On the other hand none of the respondents had reached to Stage 3 - Quantitative MAPs. The study also showed that MAPs were utilized mostly in sales and marketing related business decisions. Time requirement to adopt and implement the practices appeared to be primary problem encountered by the SMEs. Recommendations were made to optimize the utility of MAPs.

Keywords: management accounting, small and medium sized enterprise, manufacturing, accounting