The importance of managerial accounting in the workplace
By: Michelle Moran | Posted: Jun 23, 2010
Managerial accounting is concerned with the use of economic and financial information to plan and control many activities of an entity and to support the management decision course. Management accountants play important roles more specifically in planning & coordination with production, marketing and financial functions. A subset of the managerial accounting profession is cost accounting which relates to the determination and accumulation of products, processes, or service costs. Management and cost accountants are focused on the internal aspects of a business to keep it efficiently running and profitable. Managerial and cost accountants use a lot of the same data used by financial accountants. The difference lies in the fact that the data used for managerial accounting is more likely to be used for a future orientated purpose whereas the financial accounting process is showing what has already taken place. Examples of future orientated planning are budgets, benchmarking, and profit projecting. This also means that managerial accountants can take a more proactive approach when it comes to tackling business and economic troubles that can and due arise for many companies. Planning is a key part of the management process and although there are many descriptions of that process, a generally accepted definition would include reference to the process of planning, organizing and controlling businesses' activities so that the organization can achieve its desired outcomes. Being able to anticipate what revenues will be and forecasting the expenses that will be incurred to achieve those revenues are critical activities in the budgeting process. That ability is crucial to many aspects of a company and allows employees' to make more educated business decisions. The internal orientation that management accountants have to their companies differs from the predominantly...
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