What is management accounting?
Management accounting is a type of accounting that helps businesses understand their financial position on a day to day or short time basis to allow managers to make opportune decisions. As management accounting requires real time information, financial reports are generally generated on a weekly or monthly basis tracking information such as accounts payable and accounts receivable, cash on hand, sales revenue generated, inventory tracking and much more.
Management accounting is much more than just reports, it is the analysis of the businesses short time decision making and helps to improve the efficiency and effectiveness of your business.
Bookkeeping & Management Accounting
How does bookkeeping tie into management accounting? Bookkeeping is the timely, accurate entry and analysis of your businesses day to day financial information. Bookkeepers enter and monitor your accounts payable, accounts receivable, cash flow, payroll and other financial functions. Bookkeepers can generate specific and customised timely reports for managers so that decisions made are backed with the correct data.
Financial Accounting & Management Accounting
What is the difference? Financial accounting is the mandatory reporting of the financial position of the business to external stakeholders by compiling information into annual financial statements and taxation returns. Management accounting, on the other hand, is the accounting of internal processes and transactions.
Why does this matter?
The day to day accounting functions of a business are essential for the business to thrive and survive, however these functions are time-consuming particularly if those completing the activities are inexperienced. This is why many successful businesses outsource these activities to trained, experienced, qualified professionals so that managers and owners can focus on the core function of the business and can rely on accurate financial information to guide and maximise the decision-making process.
McGregor Accounts can help you and your business prepare regular management accounts, detailed analysis and general bookkeeping with the quality you can count on.