Developing Financial Reporting in Manufacturing Business

Abstract

The objective of this Master’s thesis was to define the best possible cost accounting method for the case company. The case company in this thesis was a Finnish manufacturing company. The company needed more accurate financial reporting to discover which of its products, customer, etc. are profitable and which not. To answer this, the objective was to find out the best possible cost accounting method to serve the manufacturing company. Due to a confidentiality issues, the manufacturing company in this study is referred to as the case company.

This study was conducted as an action research. This study applied qualitative data collecting methods to analyse the case company’s present situation. Through interviews and surveys, the employees and other internal stakeholders were the main source for this data. The theoretical framework of this study focuses on cost accounting methods in general and decision making based on other measurement tools than just the financial tools.

The current state analysis revealed that the case company’s current financial reporting has shortages that affects the accuracy of the reports. It also showed that the employees use lots of time to produce the required reports instead of having them ready from the system. The survey for future needs revealed that the management would appreciate a standard set of reports that they would obtain regularly so they could better focus on analysing the business.

The author recommends that the case company improves its financial accounting in a long run either by adopting the new method proposed in this study or by improving the current processes to better serve the needs arising from the organisation