Key Differences Between Financial and Management Accounts

Business
Finance

INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Key differences between financial or management accounts......................................................1
Users of financial information.....................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business finance relates to corporate capital and cash. Finance is the backbone of enterprise
to buy properties, commodities, raw materials and to the other movement of economic activity is
needed. Business finance can be described as 'giving money when a company needs it’. Every
enterprise needs money (Cole, 2018). Money required at the moment the business starts is
needed. Once the firm is in operation it's also needed. When an organization increases in size and
expands, the company requires financing. These reports cover some topics that is about
differences between financial or management accounting and also evaluate the usefulness for
users of financial information.
MAIN BODY
Financial accounting is the method of producing financial reports that are used by
businesses to show their financial results and status to stakeholders outside the business,
including shareholders, creditors, distributors and clients. It is one of the most important
differences from managerial accounting which, on the other hand, involves the preparation of
regular reports and projections for managers within the firm.
Management accounting includes offering adequate information for decision making
process, scheduling, expense management and performance review (Dijkhuizen And et.al.,
2018). It turns data into facts, expertise, and knowledge regarding the operations of a
corporation. This is one step better than paying for expenses. Management accounting seeks to
learn the reasons for income or loss and studies the factors that affect the efficacy of decision
taking.
Key differences between financial or management accounts
Key basis of
difference
Financial accounts Management accounts
Aim Main goal is to deliver information
to third parties. Outside parties are
shareholders, owners, customers etc.
Therefore, it is mainly intended to
help investors make educated
decisions.
The aim here is differ from that of
financial accounting.
Management accounting data is
usually intended for executives to
make more informed strategic
decisions.
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