- The Role of Inventory Management Accounting with Corporate Governance in Digital Age. - For all businesses, inventory plays a very important role in the process of production and business. - If the inventory level is too high, the price will increase, which makes it difficult to compete with our competitors in the market. - In order to manage inventory well, there must be an effective combination between the functional sections in the enterprise, in which general accounting and accounting management in particular are efficient management tools for the managers. - By using qualitative research methodology and making a survey in 2017, the article reflects the role of inventory management accounting with administrative functions and positions in enterprises.. - Inventory Management Accounting (IMA) is a part of management accounting, providing necessary, specific, timely information, suitable for inventory management accounting activities in the enterprise. - Inventory Management Accounting not only provides historical information, but also provides directional information to help managers easily analyze, evaluate and make appropriate decisions. - Inventory Management Accounting always exists in every organization, but the effect of providing information to different audiences will vary, depending on the construction and operation of the accounting system. - developed a modern inventory management accounting system that provides useful information to internal managers to assist them in planning, implementation of the plan and the inspection and assessment of the performance of inventory plans. - In order to bring out the best business plan, firstly, enterprises need to know the rules of the market, in addition, they also need to know how to promote and make the most of their available resources in order to find out some logical management solutions that fit their organizational structure. - Therefore, the organization of inventory management accounting has always been the top concern of many corporates and is applied to their management activities, because management accounting plays an important role in providing useful, flexible, fast and effective information to serve the management process.. - The author makes a quick survey about the application of inventory management accounting in some manufacturing companies in Vietnam in 2017 such as: paper, beverage, pottery enterprises… According to the preliminary survey of the author, managers in these enterprises all understand and apply inventory management accounting at a simple level of about 23%. - Fig 1: The percentage of applying inventory management accounting in VietNamese manufacturing enterprises. - Based on author’s survey, the perception and process of organizing management accounting in the conditions and environment of Vietnamese enterprises, especially in inventory management accounting, still have many difficulties and unavoidable limitations due to some main reasons such as: The enterprises have applied management accounting but the model applied is not scientific and reasonable, the administrators have not paid much attention to the application of management acccounting in business, employees' qualification does not meet the requirement from the manager, the demand of the market, the size of business… The factors that affect IMA can be exposed as follows:. - Inventory Management Accounting Application. - Fig 2: Factors affect inventory management accounting application in enterprise. - In the present days, as Vietnam has increasingly integrated into international and regional economies, accounting in general and management accounting in particular is a very important factor to create strength for businesses. - The role of inventory management accounting for enterprises is expressed in different aspects, specifically:. - For planning function: Planning is the important task of corporate governance, it involves building a path to common goals and specific goals of the company. - Inventory Management Accounting plays an important role in preparation of these two types of plans. - Through information provided by IMA, managers will have the idea for allocating appropriate budgets for production, preserving, sales, and investment activities to ensure safety and delivery of the whole organization. - IMA can anticipate some possible challenges to the operations of the business, helping the manager to get prepared and get ready for dealing with potential inventory-related risks.. - At the same time, to give direction, business managements also need to have updated information about all activities of the unit on the aspects, locations and objects involved. - In the process of implementation, accounting management is always monitored and managed in terms of quantity and value to provide timely information to managers to manage inventory, contribute to avoid losses, minimize costs and capture the market chances to plan. - Inventory Management. - Accounting Application Awareness of the administrator. - In addition, the presentation of information in the inventory reports covers the financial and non-financial aspects of the company at different times as required by the management, making the the implementation of the plan become easier for directors.. - When controlling and evaluating, enterprises need to define measurement conditions and criteria. - Inventory Management Accounting plays an important role in measuring and evaluating the results of the unit.. - The decision- making process of the manager is the selection from a variety of business plans, each of which is considered to include a lot of accounting information. - they will help to provide, analyze and prove the decisions of the administrator.. - Fig 3: The role of inventory management accounting for decision –making in business. - Source: Mayanja MK and Vander Poll HM (2011) Inventory Management. - Moneytary information about cost, revenue of inventory Management and decision. - They need to work closely with the accounting department to obtain appropriate and comprehensive reports for specific areas that need to be consulted. - Mayanja MK and Vander Poll HM (2011) argued that Management Accounting staff should report to the board about in-depth analysis of key issues in the internal and external business environment based on deep knowledge of asset management activities. - Through this, the Board of Directors and CEOs will make appropriate decisions and directions to increase the value of the company's assets.. - However, businesses in general and business managers in particular, need to determine the true capacity of their IMA staff to make specific requirements. - Ehrhardt and Brigham (2009) argued that management accounting contributes to preserving the ethics of business as well as corporate executives. - Management accounting in general and IMA in particular, through their work can detect fraud related to enterprises' inventory and report the actual value, from which to effect to the tasks of executives but also ensure transparency and otherwise create reliability for investors.. - Therefore, they have not paid much attention for information technology and invested in management accounting. - In addition, IMA in Vietnamese enterprises are not really popular, creating a major obstacle to promote the development of management accounting in the area. - Many enterprises have not created the link about inventory management accounting between departments, so the efficiency of providing information to managers is very low.. - Therefore, in order to put IMA into operation, it is popularly applied in state management agencies and the majority of enterprises in VietNam, we need to develop a plan to accelerate the development of IMA in the coming years. - accounting, intensifying training and developing management accounting human resources for state employees, enterprises, start-up youth and students.. - Vietnamese enterprises need to develop their IMA implementation in line with the requirements and actual conditions of financial resources, human resources as well as their business goals in the future. - Therefore, based on the characteristics of the business activities, managers need to determine the purpose and target participating in IMA.. - In addition, management accounting is different from financial accounting, before conducting IMA application, enterprises need to review the internal and external relationships that affect IMA plans to identify bad situations that may occur during the business process.. - In the enterprise, the human factor always plays the leading role and is the successful factor of enterprises. - Assembly, especially the progress of science and technology, businesses need to strengthen the work training and fostering to raise the professional level for organizations and individuals who participate in network management activities as well as fully exploit the applicants of management accounting. - Besides, those enterprises need to send staff to attend training courses on advanced management accounting, administration network…. - Management Accounting is an area of economic science, creating a useful channel for information management, which plays an important role in supporting corporate governance. - The information provided by IMA is a reliable, transparent and timely information system about the responsibility of the executives in administrating and managing the assets of the business. - On the other hand, inventory management accounting information facilitates better management functions and aligns business activities with the external environment. - It is through the exchange of information that the business, especially the new manager, understands the needs of customers, suppliers' capabilities and other issues that arise in the organization.. - Therefore, businesses in general and Vietnamese enterprises in particular should consider this type of accounting and therefore have specific measures to develop, organize and maintain an effective inventory management accounting system.. - Alan Robert, (1997), ‘Charts of Accounts in Europe: An Overview’, Management Accounting . - Mayanja MK and Vander Poll HM, (2011), Management accounting: An instrument for implementing effective corporate governance.. - Zwelihle Wiseman Nzuza, (2013), ‘Factors affecting the success of inventory control in the Stores Division of the eThekwini Municipality, Durban: a case study’, Durban University of Technology, South Africa
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