Role Of Accounting In Business Scorecard

An organization uses several key measures and tools to show stakeholder that the organization performance is good enough to meet objectives and respective goals. An empirical concept of balance scorecard plays a role in the nineteen century to measure how well an organization is doing in a view of competing all the stakeholder concerns. It is used to monitor and enhancing business operation within a customer, internal business function and learning the growth of each segment of the business(Cardos 2014). 

It is assumed the strategy and tactics management used should comply with a balanced scorecard along with information which is being tracked. Let’s dive deeper to understand the role of accounting in a business scorecard.

Balanced Score Card Quadrants

A balanced scorecard is comprised of four quadrants containing distinct perspective. All these perspective are listed below:-

Financial

Customer

Internal process

Learning and growth

It is designed in such a way whole organizational process whole internal and external operations get involved. 

From a financial perspective, performance indicators get measured included a high number of debtors and creditors return of investment and profitability. A problem arises in financials are-

These financial stats are based on past data and highlight what has happened and would be a good indicator of analyzing financial performance. Also, it is not focused on future financial strategies. If you have any doubt in regards to the financial perspective, you can ask for professional dissertation writing Brimington help from SourceEsssay.

Customer Perspective

They are following measuring having a direct impact on the customer. It involved period involved in contacting customer complaints, repeat customer volume etc

In the business sphere, utmost importance is attributed to customer satisfaction. And if there are a high number of unsatisfied customers, then it is assumed business is not doing well (Sheedy& Zhang, 2018). 

Business Process

These perspectives measure time taken to produce products and services, rework and time is taken to process an order

These internal measures allow a business to measure how well the organization is doing and operating its service to meet customer demand

Growth And Learning Perspective

These perspective measures learning ability and must include training period, qualified staff and hours spent by an employee to complete tasks. This quadrant also recognizes the knowledge worker organization and are mutually consistent and reinforcing. To know more about growth and learning perspective for the case study, get instant assignment help Sydney from SourceEssay today.

How To Develop A Balanced Scorecard 

The balanced scorecard is developed and being used by many companies irrespective of marketing conditions. It is generally used by top management level to support organizational functions. According to Kaplan and Norton, a balanced scorecard can be developed in given ways.

Step 1- Company’s top executive should form a team and clarifies the responsibility and job roles

Step 2- Top three layers of executives must come together to discuss prime strategy and must reflect the desired outcomes to satisfy different stakeholders

Step 3- Managers should eliminate programs that are unable to contribute to reaching business goals(Atkinson, 2006)

Step 4- Top management should review the scorecard at the end 

Balance Score Card Uses

• Updating and clarifying the strategy
• Communicating strategies throughout the company 
• Alignment of both individual and company’s goals together
• Linking short term or long-term strategy with the company’s goals 
• Identifying and strategies a company’s objectives
• Conducting periodic performance review to analyze the efficiency of business operation

Drawbacks

• It doesn’t comfy single segregated report, the popular result will be available in the context of the return of investment
• It can produce confusion among management outcomes as well as conflicting signals. 
• It involved the substantial shifting of the corporate culture
• It takes considerable and thought to develop a balanced scorecard accurate(CIMA, 2020)

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Conclusion

The performance measure considered to be most crucial components evaluates managers and the company’s operation. In this direction, a balanced scorecard plays a significant role which is used to monitor and enhancing business operation within a customer, internal business function and learning the growth of each segment of the business. It is designed in such a way whole organizational process whole internal and external get involved. But there are some disadvantages that have been implied in the study such as BSC can produce confusion among management outcomes as well as conflicting signals.  

References

 

Atkinson, H. (2006). Strategy implementation: a role for the balanced scorecard?. Management decision.

Cardos, I. R., &Cardos, V. D. (2014). Measuring customer profitability with activity-based costing and balanced scorecard. Annales Universitatis Apulensis: Series Oeconomica, 16(1), 52.

CIMA(2020). Balanced Score Card. Available at-https://link.springer.com/referenceworkentry/10.1007%2F978-94-007-2512-6_130 [Data Accessed on 12 February 2021]

Kaplan, R. S. (2009). Conceptual foundations of the balanced scorecard. Handbooks of management accounting research, 3, 1253-1269.

 

Sheedy, E. A., & Zhang, L. (2018). Behaviour of Finance Professionals Under the Balanced Scorecard. Macquarie University Faculty of Business & Economics Research Paper.