Procedure Of Creating Accounts And Management Reports

Overview of Qantas Airlines

Discuss about the Procedure Of Creating Accounts And Management Reports.

Management accounting is the procedure of creating accounts and management reports that offer precise and timely statistical and financial information to administrator to take long-term and short-term decisions. . It recognizes, evaluates, examines, understands and transfers data to allow a company to follow its goals. Management accounting is also known as cost accounting. This report is being prepared in order to highlight the importance of management accounting in the business and how it helps in attaining the goals and strategies of the business. The report will discuss about one of the important tools of management accounting i.e. Balanced Scorecard and its features. Besides this, the report will discuss whether the balanced scorecard will be feasible for the organization to implement or not. The company that has been selected is Qantas Airlines which is one of the famous airlines of Australia. Difference between traditional performance measurement system and balanced scorecard will be presented. Further, the report will answer whether this tool of management accounting i.e. balanced scorecard will be suitable for the company or not.

Qantas is the national airline and one of the largest airline by fleet size. It is third oldest airline in the world after KLM and Avianca. Founded in 1920, and started the international passenger flights in May 1935. Originally the name was in the form of an acronym “Queensland and Northern Territory Aerial Services”. It is also known as “The flying kangaroo”.  The airline is based in the suburbs of Sydney. It has a subsidiary company which namely Jetconnect provides services between Australia and New Zealand operating under the name of Qantas brand. Jet star Airways a low cost airline (Qantas, 2017).

The fleet size is 124 with 85 destinations. The company is operating with the employee count of about 30000. The information over the years of the revenue and the assets of Qantas is depicted in the table below.

	2008 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	2009	2010	2011	2012	2013	2014	2015	2016	2017
Turnover (A$m)	15,627	14,552	13,772	14,894	15,724	15,902	15,352	15,816	15,689	15,566
Profits (Statutory profit/loss after tax) (A$m)	970	123	116	249	−244	6	−2,843	560	985	793
Number of employees (FTE)	33,670	33,966	32,489	33,169	33,584	33,265	30,751	28,622	29,204	29,596
Number of passengers (m)	38.6	38.4	41.4	44.5	46.7	48.2	48.8	49.2	52.7	53.7
Passenger load factor (%)	80.7	79.6	80.8	80.1	80.1	79.3	77.4	79.1	80.1	80.6
Number of aircraft (at year end)	224	229	254	283	308	312	308	299	303	309

The major mission of the Qantas Airlines is to be a leading company in the Australia dedicated to become the best company. The aim of the company is to fulfil the expectations of the customers to an extent that they invest in their services (Li & Q, 2017).

The vision of the company is to operate the world’s best and largest premium airline services, keeping in mind the key drivers such as priority of safety, a sense of direction, excellence in customer services and to achieve a growth in the revenue by 23%. The foremost concern is the safety of the passengers in the aviation industry. To increase the customer value there is diverse range of options for example the packaged trips, facility of lounge, the strategy of making alliances can build the customer satisfaction and loyalty. The CEO of the Qantas believes that the two airline strategy is the ultimate driver of the success of the company (Qantas, 2017)

Mission and Vision of Qantas Airlines

In 2016/2017 the group further strengthened its capital position and the core objectives of the company are as follows. To maintain such kind of capital structure that can minimise the cost of the capital. To achieve the return on capital employed beyond 10% throughout the cycle. Lastly to grow the invested capital with the investment that can generate surplus for the shareholders.

The balance score card is a system which is involved in the strategic planning and management of the system which the organisations use to align the daily activities, to prioritize the project and services, to communicate the right information and to achieve the target and to measure and monitor the strategic targets and progress. The balance scorecard is used to measure the feedback and on the basis of it a review is created (Mone & London, 2018). The major purpose behind the balance score card is to insulate the sound behaviour in the organisation by introducing the four separate areas which needs an in-depth analysis. The main evidence of the system of the balance score card is that they are distributed under the four categories which is the financial perspective, the perspective from the customer’s point of view, the internal process perspective and lastly the learning and the growth perspective (Dolan & Shahbaznezhad, 2017). The balanced scorecard is said to be a strategic tool which was developed by Norton and Kaplan (1996) as a reply to those who assumed that companies only survive in the market to satisfy stockholders.  According to Kaplan and Nortan the balance score card is used to translate the missions and the strategies into the goals and the objectives and creates a balance between the short term and the long term objectives (Whyte & Lohmann, 2015).

The balanced scorecard is said to be a dynamic tool that can be utilized to execute a strategy of the company. According to Nortan and Kaplan, the balanced scorecard comprises variety of measures that permit the managers to have a frequent but complete view of the company (Rao, Wang & Huang, 2016).

Financial evaluation is said to be the important perspective of balanced scorecard. Not a single manager of the company will get interested in the BSC if does not consider the financial perspective as it involves the information of profits, which is the main part of the goal for creating stakeholder value. The financial analysis comprises of the factors like growth of the sales, return on investment and the operating income.

Optimal Capital Structure

Evaluating customer perspective enables to know more about the company as it is observed by the customers, who are said to the king of the market (Lucarelli, 2014). The customer perspective generally considers the satisfaction as well as the retention of the customers.

In order to survive in the market, company has to know more about its key competencies. A balanced scorecard recognizes the internal procedure of business. This comprises the understanding of the procedure of the company which are very important to get success and analysing how the company is performing. The internal analysis focuses on how the business processes are connected with the strategic goals of the organisation.

Company should regularly develop and do innovations to survive. Therefore, it is included in the BSC system. Lastly the learning and the growth analysis is all about measuring the satisfaction of the employees and the workers and the retention along with the information system procedure.

• Balanced scorecard discusses about the strategies of the company by concentrating on the cause and effect relationship. It pinpoints particular measures and objectives in the perspective of learning and growth which can enhance the internal process of business (Charter Management Institute, 2018).
• Balanced scorecard supports in communicating the policies and strategies created by the administrators of the company by decoding the strategy into clear and related set of comprehensible and quantifiable operative targets.
• A decent balance scorecard executes as an apparatus for correspondence that just characterizes that objective of the organization and vital goals to each representative. With the help of this, every individual perceives their obligations in the association. Moreover, this adjusted scorecard must have an overseeing light for each individual from administration when they get caught in an unpractised condition or when the target winds up till defined(Olberding & Frambes, 2016). 
• An effective balance scorecard is exceptionally adaptable. It doesn’t outline firm limits close-by the key targets. In its place, it allows the administration of the organization to do the fundamental changes each time the need gets up.
• A sound balance score-card decides the circumstances and end results relationship of various purposes to its employees and partners. The clarification of the goal of the organization and its objective must be essentially disclosed as to diminish the probabilities of any future conflicts.
• A passable balance scorecard must be sufficiently fit to discuss the injury because of here and now choices on the potential advancement of the business. As some of the time the conditions emerge that couple of administrators are unfit to have the prescience and they wind up spending or putting resources into the short-run designs. In any case, a great balance scorecard gives them a basic and clear perspective of circumstances and end results relationship that help them in knowing the outcomes of their activities (Duggan, 2018).
• The finest piece of a sound balance scorecard is that it doesn’t keep up the officials’ frequently includes in various measures. Truth be told, authorities can include other fundamental capacities, for example, organizing individuals, staffing, arranging, and checking hazard factors (Balanced Scorecard Institute, 2017).  
• The balance scorecard lessens the quantity of measures used by perceiving just the basic ones. Sidestepping a spread of measures accentuations the consideration of the administration on the key parts of the execution system(Buckingham & Goodall, 2015).
• The organizations that are significantly concerned about the benefit, the balance scorecard approach gives a solid impact on the budgetary measures and targets. Now and again officials give excessively immensity to the quality, fulfilment of the client, development yet they won’t make substantial advantages. An adequately balance scorecard observes non-budgetary measures as a noteworthy bit of the program or system to accomplish and upgrade future monetary execution (Agarwal, 2018). At the point when non-budgetary and monetary measures of execution are effectively related in the balance scorecards, a few non-money related measures help as first pointers of forthcoming money related execution(Seufert, 2014).

Ideology	Purposes	Aim	Evaluation
Perspective of the Customers	Customer Satisfaction. Most on time domestic Carrier: Qantas domestic.	Improvement of quality and easy access to the customers of the services.	Customers are enrolling the membership with the airlines.
Business Perspective Internally	Convenience and easy mechanisms of payment availed for the customers (Hoque, 2014).	To increase the sales as well as revenue volume.	$ 1.1 billion cost and revenue benefits have been realised Ex Fuel Revenue have been decreased by 6%.
Learning and Innovation	To acknowledge the contribution of the employee and build a strong team.	To keep the employees motivated and trained.	Employee’s satisfaction and the retention ratio have improved by the 12%.
Financial Ideology	Sales leadership in airline services and to ensure the financial stability.	Higher returns and cost-cutting to save the funds for future investments.	Operating margin ratio and return on investment. The net income $1401 million, and is about to increase it by 25%.

Traditional Performance system of the management is used to track the financial performance of the organisation in association with earnings collected from selling of the capital. The major focus is on financial measures which are based on reports of internal accounting, revenue, cash flows and earning per share, return on assets and economic value added. Due to reflection of the past data only the measures are termed as lag indicators. Even though the performance and the quantitative metrics can control the discretions yet at time sit can result in unusual decision making for the long term purposes (Malgwi & Dahiru, 2014).

On the other hand the balance score card approach is created on the basis on the basis of the forward thinking measurement by keeping a knot between “What the organisations want to achieve and how they want to reach a particular position. In order to successfully execute vision and strategy of the organisation must control all the business units, functional units, groups and the individuals are all pursuing strategic goals.

Balance Scorecard can be built up by Qantas Airlines Company in its business tasks with a specific end goal to adjust every one of the exercises. This arrangement of execution administration will enhance the non-money related measures of Qantas Airlines to conventional monetary measurements and will make the organization the market pioneer. In the event that the organization takes after adjusted scorecard approach then it will bolster in following the non-monetary measures, for example, relationship assessment between workers, clients, providers and friends, and the capacity of the organization to deal with a maintainable business (Zizlavsky, 2014). Components that express the reasonableness of Balance scorecard in Qantas Airlines are

Balanced scorecard approach

The Balance scorecard approach will support Qantas Airlines in making decisions its fundamental procedures and foreseen results. These sectors will help representatives in understanding what they need to do and what ought to be kept aside. Denied the mechanized information accumulation and detailing methods that are connected with scorecard age each office would have taken after their own procedure. An adjusted scorecard joins together and rules the tasks of the organization (Giannopoulos & Holt, 2013).

Doing the right thing at the right time with the right individual takes expertise and experience. Making a balance scorecard assists the business entity to control how representatives are executing the present designs. By applying a SWOT investigation, a business can perceive its qualities to create and the chances to investigate. It might likewise uncover the shortcomings and dangers to the organization (Yilmaz, 2013). Making a scorecard and apportioning each movement can be a change. It presents and develops links with the qualities, vision, and mission of the organization.

Analysing a balance scorecard as a portion of the methodology of strategic management might interpret whether the business is drawing wrong thing or right.

A balance scorecard approach assists the managing authorities of the organization to convey the vision and mission of the entire organization at each level. Prioritization and basic leadership ends up more straightforward in light of the fact that the scorecard presents the criteria for proper projects.

A balance scorecard approach aids in developing the techniques of the association by figuring out what is basic for the organization. Program tasks, benefit conveyance, and announcing generation measurements supports organization to gauge how well it is performing and where there is have to give careful consideration, contingent upon the mission and vision of the organization. For example, if the fulfilment of the client is a noteworthy need then systems should be improved (Suvarna, 2012).

Conclusion

After summing up the above executed analysis it has been inferred that one might say that balance scorecard is one of the cutting edge execution estimation frameworks which bolster organizations in estimating it’s non-budgetary and money related exercises which are imperative for the present business condition. The above report is involved different viewpoints which will be extremely gainful for the future point of view of the business. The report includes the review of the Qantas Airlines Company which mirrors that the business organization is one of the best entity offerings of high quality. Qantas Airlines include different exercises in its business task that can be sorted into non-money related and budgetary exercises. Accordingly, to keep up every one of the exercises and pick up an upper hand in the market Qantas Airlines need to embrace adjusted scorecard approach in its business activities. In addition, the report additionally features the idea of the adjusted scorecard and its essential highlights. Alongside this execution of the adjusted scorecard has been done on Qantas Airlines Company. Further, a clarification has been given about how adjusted scorecard is not quite the same as conventional execution estimation framework and how it is appropriate for Qantas Airlines Company.

References

Agarwal, R. (2018). Traditional Performance Measurement Techniques. Retrieved From https://www.yourarticlelibrary.com/accounting/performance-measurement/traditional-performance-measurement-techniques/53079 

Balanced Scorecard Institute (2017). Deployment of the Balanced Scorecard Measurement System [online]. Retrieved from https://www.balancedscorecard.org/BSC-Basics/Cascading-Creating-Alignment/Applications 

Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review, 93(4), 40-50.

Charter Management Institute (2018). Implementing the Balanced Scorecard, Retrieved From  https://www.valuing-your-talent-framework.com/sites/default/files/resources/CHK-154%20Implementing%20the%20balanced%20scorecard.pdf

Dolan, R., & Shahbaznezhad, H. (2017). Social Media Strategy in Services: The Effect of Airline Brand Posts on Engagement.

Duggan, T. (2018). How a Balanced Score Card Helps in Drafting a Strategy in an Organization. Retrieved From https://smallbusiness.chron.com/balanced-score-card-helps-drafting-strategy-organization-77101.html 

Giannopoulos, G., and Holt, A. (2013). The Use of the Balanced Scorecard in Small Companies. International Journal of Business and Management, 8(14), 1-22.

Hoque, Z. (2014). 20 years of studies on the balanced scorecard: trends, accomplishments, gaps and opportunities for future research. The British accounting review, 46(1), 33-59.

Li, Y., & Cui, Q. (2017). Carbon neutral growth from 2020 strategy and airline environmental inefficiency: A Network Range Adjusted Environmental Data Envelopment Analysis. Applied energy, 199, 13-24.

Lucarelli, G. (2014). The corporate strategy of Qantas Airways. A case study.

Malgwi, A.A., and Dahiru, H. (2014). Balanced Scorecard financial measurement of organizational performance: A review. Journal of Economics and Finance, 4(6), 1-10.

Mone, E. M., & London, M. (2018). Employee engagement through effective performance management: A practical guide for managers. Routledge.

Olberding, J. C., & Frambes, P. (2016). Financial Management of Special Events: Toward a More Comprehensive Approach. In Social Enterprise and Special Events 10(3), 135-168.

Qantas 2017, Annual Report, Retrieved From, https://investor.qantas.com/investors/?page=annual-reports

Rao, Z., Wang, Q., & Huang, C. (2016). Investigation of the thermal performance of phase change material/mini-channel coupled battery thermal management system. Applied energy, 164, 659-669.

Seufert, J. (2014). Qantas and its marginal abatement cost curve in the context of late capitalism and climate change. New York: Springer.

Suvarna, V.V. (2012). Comparing balanced Scorecard with traditional performance measurement. Retrieved From https://vaishaksuvarna-bizzscribes.blogspot.in/2012/12/comparing-balanced-scorecardbsc-with.html 

Whyte, R., & Lohmann, G. (2015). The carrier-within-a-carrier strategy: An analysis of Jetstar. Journal of Air Transport Management, 42, 141-148.

Yilmaz, K. (2013). The Balanced Scorecard. 2nd end. Germany: GRIN Verlag.

Zizlavsky, O. (2014). The Balanced Scorecard: Innovative Performance Measurement and Management Control System. Journal of Technology Management & Innovation, 9(3), 210-222.