How to differentiate between financial and management accounting?
Our clients often question us on how financial and management accounting practices differ. Generally, we define the former as a separate field which deals with business transactions; the process of a thorough business analysis, generally overseeing financial tasks and reporting to external governing bodies about their status. The main persons and organisations concerned in this area are: Governmental bodies, business people, banks, corporations, Shareholders, different LTDs and other company types. Management accounting in turn is more of an internal procedure of providing Managers with financial and other important information necessary to make effective business decisions.
Here is a more specified list of the differences between management and financial accounting:
|Management accounting||Financial accounting|
|Is connected with individual company products/subdivisions.||Concerns the whole company.|
|There is no special requirement to fulfil in this service.||This service needs to exist due to state legislation and reporting requirements.|
|This service’s applications are created primarily for supplying information to members and upper management of the company.||Applications are needed to send updates of company balance sheets and audits to external authorities.|
All about management accounting reports
These reports are mostly orientated on the usage by the internal staff working within the company. They are created for numerous purposes and on different periods of time (weekly, monthly, quarterly, biannually); and are sometimes called a “helicopter view”, as they provide upper management of with a general overview of the company’s financial situation as a whole.
Our financial and management accounting services are orientated on resolving fundamental and challenging issues in our clients businesses. We give professional support and help with financial reporting and accounting, budget disposal planning, profit and loss balance sheets, optimisation of taxes, digital advancements, creation of a strategic development plan for companies worldwide.
Feel free to contact us for necessary support or more detailed information about our services.
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