NATURE OF DIFFERENT
CONTROL METHODS
AND TECHNIQUES IN
ACCOUNTING AND
MARKETING
Explain the different control methods,
concepts, and its application in accounting
and marketing;
OBJECTIVE Describe and interpret the different control
S: methods used in accounting and marketing;
Appreciate the importance of control
methods and its benefits towards success of
an organization.
is a management function
involves ensuring the work
performance of the organization’s
Controllin members are aligned with the
g organization’s values and
standards through monitoring,
comparing, and correcting their
actions.
are techniques used for measuring an
Control organization’s financial stability,
efficiency, effectiveness, production
Methods output, and organization members’
attitude and morale.
A. Quantitative
Methods
CONTRO
L It makes use of data and
different quantitative tools for
METHOD monitoring and controlling
S production output.
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It is considered the best-known
Two control device.
common
quantitati An organization’s budget is an
ve tools expression in financial terms of a
plan for meeting the
organization’s goals for a specific
period.
a. To establish facts that must
be taken into account
during planning;
Budgets
are used b. To prepare a description
in 2 ways: and financial information to
be used by the chain of
command to request and
manage funds.
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Internal auditing involves the independent
review and evaluation of the organization’s
non-tactical operations, such as accounting
Two and finances.
common
quantitati
ve tools As a management tool, audit measures and
evaluates the effectiveness of management
controls.
B. Non- Quantitative Methods
These refer to the overall control
performance instead of only those of
CONTROL specific organizational processes.
METHODS
These methods use tools such as
inspections, reports, direct supervision,
and on-the spot-checking and
performance evaluation or counseling to
accomplish goals.
1. FEEDFORWARD CONTROL
Types of A control method that prevents problems
in a firm because managerial action is
Non- taken before the actual problem occurs.
Quantitati
ve 2. CONCURRENT CONTROL
Methods
It is a method that takes place while work
activity is happening.
3. FEEDBACK CONTROL
Types of It is a control that takes place
Non- after the occurrence of the
Quantitati activity. It is disadvantageous
ve because, by the time the
Methods manager receives the
information, the problem had
already occurred.
4. EMPLOYEE DISCIPLINE
Types of It is a control challenge for managers,
Non- for enforcing discipline in the
workplace is not easy.
Quantitati
ve
This includes workplace privacy,
Methods
employee theft, and workplace
violence, among others, are some of
the concerns in employee discipline.
5. PROJECT MANAGEMENT
It ensures that the task of getting a project’s
Types of activities done on time, within the budget,
Non- and according to specifications, is
successfully carried out.
Quantitati
ve Project Managers need technical and
Methods interpersonal skills to control the
implementation of the project efficiently and
effectively.
a. Defining objectives
b. Identifying activities & resources
Project c. Establishing sequence & estimating
Planning time for activities
Process
Controls d. Determining the project completion
include the date
following: e. Comparing with objectives and
determining additional resource
requirements.
APPLICATION OF
MANAGEMENT CONTROL
IN ACCOUNTING AND
MARKETING CONCEPTS
AND TECHNIQUES
is the control that makes use of the
balance sheet, income statement, and
cash flow statement to analyze and
Management control
in accounting and
examine financial statements in order
finance to determine the company’s financial
soundness and viability, as well as
financial ratios to determine the
company’s stability.
is the control that makes use
of projected sales or forecast,
Manageme statistical models,
nt Control
in
econometric modeling,
Marketing surveys, historical demand
data, and actual consumption
of their products.
is considered to be the
Sales “lifeblood of the business
a. Top-Down Sales Forecast – relies
heavily on macroeconomic and industry
forecast with the use of statistical
models thru econometric modelling to
Two (2) achieve the firm’s grown target.
Sets of
Forecast
b. Bottom-Up Sales Forecast – it
used by begins by talking with customers in a
some form of survey or ‘traffic count’, by
firms: assessing the demand in the coming
periods.
1. LIQUIDITY RATIO – test the
organization’s ability to meet
Financi short term obligations; it may also
refer to acid tests done when
al inventories turn over slowly or are
Ratios difficult to sell.
Current Ratio= Current
Assets/Current Liabilities
Compute the liquidity ratio of
Example: a fast-food restaurant. Its
current assets amount to ₱ 3
million while its current
liabilities are at Php 2 million.
2. LEVERAGE RATIO – determines if
the organization is technically
insolvent. Meaning that the
organization’s financing is mainly
Financial coming from borrowed money or the
Ratios owner’s investments.
Debt-to-Asset Ratio=Total
Debt/Total Assets
Compute the leverage ratio of
Example: a fast-food restaurant. Its
Total debt amount to Php
60,000 while its total assets
are at ₱ 300,000.
3. ACTIVITY RATIO – determines if the
organization is carrying more inventory
than what it needs; the higher the
Financial ratio, the more efficiently inventory
Ratios assets are being used.
Inventory turnover = cost of goods
sold / average inventory
Compute the activity ratio of a
fast-food restaurant. Its cost of
Example: goods sold amounts to ₱ 3 million
while its average inventory for
the year is at ₱ 2 million.
4. PROFITABILITY RATIO-
determines the profits that are being
Financial generated;
Ratios
Profit Margin Ratio= Net
profit after taxes/ total sales
Jinsha’s XYZ Shop is an
outdoor fishing store that
sells lures and other fishing
Example: gears. Last year, Jinsha had a
net profit after taxes of ₱
300,000 and her Total Sales is
₱ 1,000,000.
Return on Investment =
net profit after taxes/ total
assets
What is the return on investment
if a jewelry store’s net profit after
taxes is ₱ 6,000,000 and its total
assets are ₱ 100,000,000
It is systematic monitoring at control
points that leads to change in the
organization’s strategies based on
assessments done on the said strategic
plans.
STRATEGIC
CONTROL
This control provides a chance for
comparing the plan’s intended goals
with the actual organizational
performance, and this becomes the
basis for modifications in the firm
strategies.
It is an approach or process of
measuring a company’s services and
practices against those of recognized
leaders in the industry to identify
areas for improvement.
BENCHMARKI
NG It is a widely used and well-accepted
approach because it helps
organizations gather data and
information against which
performance can be measured and
controlled
Types of 1. Strategic Benchmarking
Benchmarkin
g
It compares various strategies
and identifies the key
strategic elements of success
2. Operational
Benchmarking
Types of
Benchmarki It compares relative
ng cost or possibilities for
product differentiation.
3. Management
Benchmarking
Types of It focuses on support functions
Benchmarki such as market planning and
ng information systems, logistics,
and human resource
management, among others.