The Impact of Enterprise Resource Planning Systems on Management Accounting in Private Companies in Sri Lanka

Today there is a rapidly changing business world. Therefore most of the growing organizations are moving towards Enterprise Resource Planning (ERP) systems in order to integrate their cross functional business units. This is crucial for those organizations, to be stable and competitive in the industry. The objective of the research is to decipher the impact of Enterprise Resource Planning in Management accounting activities. A set of hypothesis is developed to evaluate how the training on ERP and vendor support has impacted on the usage of ERP system and decision making in five Management Accounting functions identified as Capital Budgeting, Budgeting, Forecasting, Activity based Costing, and Operating Statement and Reporting by means of a questionnaire. The results shows that ERP system has improved the quality of management accounting process, and the training as well as vendor support has an impact on the usage of ERP system but there is low impact on decision making process. From the results it is possible to conclude that ERP system has an impact on management accounting. As an operational system, the possibility to exploit the potential of ERP system can be achieved by having proper training as well as vendor support