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Accounting in ERP Systems
121
Ability to expand
level of detail
Source Line: SAP AG.
FIGURE 5-4 Balance sheet and income statement in SAP ERP, with several asset categories
expanded to show more detail
Managerial accounting deals with determining the costs and profitability of a
company’s activities. While the high-level information that appears in a company’s
balance sheet and income statement shows whether a firm is making an overall profit,
the goal of managerial accounting is to provide managers with detailed information for
making informed decisions, creating budgets, determining the profitability of a particular
product, sales region, or marketing campaign, and so on. Managerial accounting produces
information that managers use to control a company’s day-to-day activities and to develop
long-term plans for operations, marketing, personnel needs, repayment of debt, and other
management issues. Because managerial accounting provides reports and analyses for
internal use, companies can be flexible in how they configure their managerial accounting
systems.
Using ERP for Accounting Information
Recall from Chapter 1, that in the past, most companies had separate functional
information systems: a marketing information system, a manufacturing information
system, and so on—each with its own way of gathering data and its own file system for
recording data. Since the 1960s, legions of accountants, analysts, and programmers have
tried, often unsuccessfully, to make unintegrated systems work, as prior chapters
illustrate. Companies built these unintegrated systems primarily to handle the needs of the
individual functional areas, and secondarily to provide data to Accounting so that
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