Difference between Management Account and Finance Account

This article explains the difference between management account and finance account and their usefulness to users of financial information. It also discusses the importance of financial information for suppliers, customers, investors, government, and managers.

BUSINESS FINANCE

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
Explain difference between management account and finance account. Along with their usefulness to
users of financial information..................................................................................................................3
CONCLUSION...........................................................................................................................................6
REFERENCES............................................................................................................................................7

INTRODUCTION
The term business financing can be described as the activities which contribute to the
acquisition and maintenance of capital funds to meet an organization's financial demands and
general objectives (Bendell and Doyle, 2017). Business accounting is too valuable for
organizations to make strategic choices by internal accounts. The project report is focused on the
distinction in management account and financial account. As well as role of both of accounting is
mentioned in detailed manner under the report.
MAIN BODY
Explain difference between management account and finance account. Along with their
usefulness to users of financial information.
Management account- Management accounts are also known as management accounts and can
be defined as a tool to provide essential management details in order to make choices. The
management account is used exclusively by the management office of the organization, and is a
mixture of financial which non-financial details which are connected to internal reporting
systems by means of monetary and nonmonetary details. Throughout this context, it is necessary
to note that this account is only used by the internal corporate team. This is not beneficial for
external stakeholder of companies.
Finance account-The description, review and reporting of financial transactions relevant to the
company focuses on financial accounting (Canales, 2016). That involves writing the annual
records that are made accessible. It simply contains accounting statistics. Such accounts can
often be used by external stakeholders, not simply by internal stakeholders. This accounting is
essential for companies who involves in trading in stock exchange.
Herein, below difference between management account and finance account is done below in
such manner:
Basis Management account Finance account
Preparation This is created under management
accounting.
It is provided with financial accounting
assistance.

Information This covers all kinds of records, such
as monetary and non-monetary
details.
Only monetary details are contained
within, on the other hand.
Need The reports are produced on the basis
of demands and requirements of the
company.
Financial accounts are normally released
for one year at the close of the fiscal year.
Format of
preparing
report
Such accounts are available in no
format at all.
There is a common framework for
financial planning and companies can
adopt this model.
Compulsor
y
This is not necessary in planning such
management accounts for businesses.
The planning of these reports is quite
critical for businesses. These reports have
to be managed for certain firms that are
listed on the stock exchange.
Presentatio
n of report
Only internal stakeholders such as
executives, personnel, manager board,
etc. are provided with their
management accounts (Burns and
Dewhurst, 2016).
The reports are sent to both internally and
externally. This is as it means that
internal stakeholders decide crucially and
external stakeholders decide on
investment in the business.
Time period The planning of these management
accounts requires no time. It can be
produced at any time.
Such financial statements, on the other
side, are planned for a particular time.
Importance of financial information for users:
For users including internal and external partners, financial reporting is too useful. That is
because they take reasonable action. Herein, under the value of financial details for users is
described in this way:
Suppliers- Suppliers depend on financial information when making decisions. Supplier relations
are of vital importance for the growth of a business. In addition to managing customer
relationships, essential information is required to enable choices for suppliers. Financial details
should be important, sufficient and correct. These descriptions are followed by financial

statements. Suppliers ought to figure out crucial financial facts in order to take effective
measures.
Customers- Customers are involved in a business because they can also support a vendor that
may not fulfill their criteria. The manufacturer will thoroughly develop business-to-business
partnerships. Any business collects knowledge from a single supplier and is thus exposed to the
hazards of supply of the chain. Inaccessible inputs can have major effects on an entity,
particularly where there is an obstacle to change. Essential information that describe the potential
of a manufacturer are given in financial reporting that customers. The balance sheet represents
the financial condition of a corporation (Nyman, 2016).
Investors- A comprehensive review for investment decisions is also needed. These analyzes are
only carried out if the financial records are appropriate. A consistent structure is given in the
balance sheet and financial report to understand the value of the company for investors. By
detailing net assets, liabilities and shares, the balance sheet defines the financial structure of the
business. To determine a company's viability to invest, investors use Financial Reports. Investors
will forecast future dividends based on sales recorded in the financial statements. In reality, risks
associated with the deal may be tickled from the financial statements. Investors take judgments
on investing in a business on the basis of accessible financial details.
Government- In the tax reports of the financial accounts, the government should determine the
legitimacy of the tax recorded. Government monitors economic development periodically by
analyzing financial reports of firms from developing industries. On the other side, it will prove
challenging for government to take the right decision to determine the correct amount of tax if
sufficient financial information is not present.
Managers- Financial information is helpful for companies to make right choices it is done by
preparation of financial statements which comprise of structured financial information. The
managers utilize completely the available resources by considering financial information of
different kinds of aspects (Mian and Sufi, 2018).

CONCLUSION
Based on the aforementioned project analysis, it can be seen that between the
management account and the financial account there are considerable variations. Both features
and application to stakeholders are distinct. The next portion of the report states that financial
data is of value for various types of participants like internal and external stakeholders such as
government, customers and others. Each has an interest in corporations' financial records.

REFERENCES
Books and journal:
Bendell, J. and Doyle, I., 2017. Healing capitalism: five years in the life of business, finance and
corporate responsibility. Routledge.
Canales, R., 2016. From ideals to institutions: Institutional entrepreneurship and the growth of
Mexican small business finance. Organization Science, 27(6), pp.1548-1573.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Nyman, R.B.E., 2016. An Algorithmic Investigation of Conviction Narrative Theory:
Applications in Business, Finance and Economics (Doctoral dissertation, UCL
(University College London)).
Mian, A. and Sufi, A., 2018. Finance and business cycles: the credit-driven household demand
channel. Journal of Economic Perspectives, 32(3), pp.31-58.