Management accounting is the process of identifying, measuring, analyzing, interpreting, and communicating financial and statistical information internally to help managers make short-term decisions and pursue organizational goals. Unlike financial accounting reports for external stakeholders, management accounting generates monthly or weekly internal reports for managers showing available cash, sales, orders, debts, inventory, and other statistics to aid in planning, evaluation, and performance control. Management accounting combines accounting, finance, and management tools to improve business efficiency and evaluate management performance.

1. WHAT IS MANAGEMENT
ACCOUNTING?

2. Managerial Accounting is the
process of identifying, measuring,
analyzing, interpreting, and
communicating information for the
pursuit of an organization's goals.

3. The process of preparing management
reports and accounts that provide
accurate and timely financial and
statistical information required by
managers to make day-to-day and
short term decisions.

4. Unlike financial accounting, which produces
annual reports mainly for external
stakeholders, management accounting
generates monthly or weekly reports for an
organization's internal audiences such as
department managers and the chief
executive officer.

5.  These reports typically show the amount of available
cash, sales revenue generated, amount of orders in
hand, state of accounts payable and accounts
receivable, outstanding debts, raw material and
inventory, and may also include trend charts,
variance analysis, and other statistics. Also called
managerial accounting.

6. Management accounting deals with the future
and is futuristic in approach, while it focuses
on forecasting and decision-making. The
compilation and preservation of massive
amounts of data which is used to plan,
evaluate and control business operations and
performance is one of the key activities that
management accounting takes account of.

7. Management accounting combines
accounting, finance and management to
provide better tools and techniques for
evaluating the performance of the
management, while it is aimed at improving
the efficiency of business operations.

8. Management Accounting plays an important
role in the management process assisting the
managers to lead the business in an efficient
way executing any of these basic functions of
management effectively, Planning,
Organizing, Coordinating, Motivating,
Controlling and Communicating.

9.  When considering the difference between Financial
Accounting and Management accounting, it may be
understood that the former is meant for providing
financial information to the interested parties, whereas
the latter provides relevant information to the
managers to make policies, plans and strategies in
order that the business may be run effectively.

10.  Management accounting makes a valuable
contribution in planning process of a business
management by providing significant and relevant
data, such as, budgetary controls, cash and profit and
loss forecasts, pricing and evaluating proposals for
capital budgeting etc. Management accounting aids
greatly in centralizing the various plans into one plan
to facilitate management in effective decision making
process.