Management and Financial Accounting Can Provide Important Information in the Business Planning
Management accounting or managerial accounting is an essential subfield of the accounting that is responsible to provide information to management people in an organization. It is mainly concerned with the use of accounting information within firm and allows management to have a good control over the functions. Management and financial accounting are sophistically correlated with each other to make better understanding about the position of firm. Take a brief and analytical look at management VS financial accounting.
The management accounting information is mainly aimed to be used by the managers of company, whereas the financial accounting provides information to the shareholders and creditors to be utilized. There are many confidential measures used by the management people, instead of public report in the financial accounting. Both approaches are forward looking and vital to specify the condition of the firm. Considering some more facets of the management and financial accounting, the management professionals try to provide accurate and timely financial and statistical information to the managers. This information helps to make day-to-day as well as short term decision making procedures.
Unlike the financial accounting, the management accounting tries to generate the timely reports that may be monthly or weekly for the organization’s internal members such as chief executive officer and management department. These reports typically show the available amounts in the forms of cash, sales revenue, condition of accounts payable and accounts receivable, amount in hand, raw material, in process inventory, outstanding debt and several other statistical information. These are also termed in the managerial accounting.
The managers can use the management information systems as per the reference of financial accounting standards. This system is combined with a company’s own internal rules and regulations. The management accountants can easily generate information that will be used in future transactions. Some other key factors like industrial, private, cost, and corporate accountants can also perform some kind of management accounting. The professionals holding management accounting positions can analyze the document related to the financial information. This information is directly related to the employers for using in the issues of financial accounting. The management and financial accounting are equally responsible for performance evaluations, cost management, asset management and budgeting of the organization.