What is the difference to Financial and Management Accounting?
This is the one of the most common questions I am asked by business owners
Management Accounts are primarily used by those within a company or organisation. Reports can be generated for any period of time such as daily, weekly, monthly or quarterley. Reports are considered to be about the future and have forecasting value to those within the company, and are focussed on the current and future trends and markets. Management Accounts are used by managers to make decisions concerning the day-to-day operations of a business.
Financial Accounts is used primarily by those outside of a company or organisation. Financial reports are usually created for a set period of time, such as a financial year. Financial reports are historical factual and have predictive value to those who wish to make financial decisions or investments in a company, these MUST be filled on an annual basis.
Managerial Accounting provides Senior Management with reports that are future-oriented, while Financial Accounting provides reports based on historical information. There is no time span for producing Management Accounts but Financial Accounting Statements are generally required to be produced for the period of 12 previous months.
For further reading on the differences between Financial and Management Accounting us this link ...