ACCA MA Syllabus A. Management Information - Limitations of information - Notes ^{3 / 4}

1. Accounting System

   The accounts system will collect data from source documents such as invoices, timesheets and journal entries. 

   The data will be sorted and analysed by the coding system (described in the next chapter) type of expense, department, manager and job. 

   Reports of direct and indirect costs compared to budgets may be produced at regular intervals to help managers plan and control costs. 

   Ad hoc reports may be produced to help managers make specific decisions.

2. Payroll System

   The payroll system may provide information concerning detailed labour costs. 

   Hours paid may be analysed into productive work and non-productive time such as training, sick, holiday, and idle time. 

   Labour turnover by department or manager may be analysed and may help management to assess the employment and motivation policies. These will be described in more detail later on.

3. Strategic Planning System

   The strategic planning system may provide information relating to the organisation’s objectives and targets. 

   Assumptions relating to the external environment may be detailed. 

   Details of the organisation’s capital investment programme and product launch programme may also be recorded here. 

   Some of this information will be very commercially sensitive and only accessed by top managers in the organisation.

Businesses are finding it increasingly difficult to succeed if they ignore the external environment which will influence their activities. 

The process is known as environmental scanning or environmental monitor. 

Data is collected from outside, as well as from inside, the organisation and used in the decision-making process.

It is important to note that internal information is produced by the company itself so they are aware of any limitations in its quality or reliability. 

External information is not under the control of the organisation - they may not be aware of any limitations in its quality.

1. Government Sources

   The primary purpose of this data is to provide information for economic planning at the national level. 

   This data also serves the purpose of providing industry with useful background information for deciding on future policies such as raising new finance or recruiting specialised labour. 

   The data is only published in general terms (e.g. for a particular industry or geographical area).

2. Business Contacts

   Government-produced information will be broadly based and general, dealing with the economy as a whole or particular sectors or industries. 

   An organisation may be looking for information more focused on its own position. Its day-to-day business contacts, customers and suppliers, can be a useful source of this information.

   • Customers can provide information on such matters as:

     - The product specification which they require and their quality requirements

     - Requirements for delivery periods

     - Preference for packaging and distribution methods

     - Feedback on the above and on general aspects of customer service.

   • Suppliers may be able to provide information on:

     - Quantity discounts and volume rebates which may help the organisation to decide on order size

     - Availability of products and services

     - Alternative products or services which may be available or may become available

     - Technical specifications of their product.

3. Trade Associations and Trade Journals

   Most major industries have their own trade association. The role of these organisations includes:

   • Representing their member firms in legal and other disputes

   • Providing quality assurance schemes for customers of member organisations

   • Laying down codes of practice to be followed by their member organisations

   • Publishing trade journals and other information useful for the management and development of their businesses.

4. The Financial Press, Business Press and Other Media

   In the UK, particular newspapers such as The Financial Times, the Guardian, The Times and the Daily Telegraph provide statistics and financial reviews as well as business economic news and commentary. 

   Such information is now also widely available via electronic media and digital television services (such as Bloomberg TV). 

   There is also the internet as a widely available source of up-to-date financial information.

5. The Internet

   The internet is a global network allowing any computer with a telecommunications link to send and receive information to and from any other computer. 

   Information on the internet is not necessarily good information.  The reliability and reputation of the provider is important.