Judul : 7 Differences in Financial Accounting and Management Accounting
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7 Differences in Financial Accounting and Management Accounting
Both types of accounting certainly have different objectives, characteristics, and types of outputs and inputs. Sometimes, this confuses some people. Therefore, in this article we will discuss some differences from financial accounting and management accounting.
Aim
The purpose of financial accounting is to produce financial reports that describe the condition and performance of the company. Meanwhile, the purpose of management accounting is to produce reports specifically and in detail, identify problems that arise and resolve the problem.
User Report
Financial accounting is used to present company financial information to users who are outside the company (external parties) and are not used to make decisions about the company. For example shareholders, government (government agencies, director general of taxes), creditors, or financial analysts.
Meanwhile, management accounting is used to provide financial information for the needs of the management or internal parties of the company. The information generated will later be used as evaluation material and a means of decision making for the company. For example managers, executives, sales, administrative employees, or supervisors.
Scope
Reports from financial accounting present financial information about the company as a whole, for example the balance sheet, income statement, and others. While management accounting reports provide information that aims to report only to a part of the company. For example, marketing, production, and other parts.
Time span
Financial accounting produces financial statements that are less flexible and can only cover a certain period of time. For example, a period of one year, half a year, or monthly. While management accounting has a much more flexible time span compared to financial accounting, for example daily or weekly.
Information Focus
Financial accounting focuses on past information by providing an overview of corporate management's responsibility for managing corporate funds. While management accounting tends to be oriented towards the future.
Information Type
Financial accounting only measures finance. While management accounting measures finance and operations as well as measuring physical processes, suppliers, technology, competitors, and also customers.
Nature of Information
The nature of information from financial accounting requires a high level of accuracy, objectivity, can be tested for truth, and accurate. Usually the management uses independent third party services. The nature of information on management accounting must be able to help management in making a decision both planning, organizing, directing, and controlling decisions. Therefore management accounting does not only rely on one accounting discipline but also takes other disciplines such as management disciplines.
Financial accounting and management accounting are two different things. You as a businessman must know carefully about these two things in order to run the company's accounting process properly. To help you in the accounting process, you can now take advantage of accounting software.
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