Management accounting combines accounting, finance, and management also familiar as managerial or cost accounting differ from financial accounting in that it produces reports for a company’s internal stakeholders as opposed to external stakeholders.
In simple word, managers use the resources of managerial accounting information is designed to help managers within the organization make decisions, while financial accounting is designed to provide information to parties outside the organization.
Management accounting is the sourcing, identifying, measuring, analyzing, interpreting, communicating and use of decision-relevant financial and non-financial information for the pursuit of an organization’s goals. This financial and statistical information helps business managers so that they can make day-to-day and short-term managerial decisions.
According to the Institute of Management Accountants (IMA): “Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy”
In other word, Management Accounting is the process of analysis, explanation, and presentation of accounting information in order to assist management in the process of decision making, the creation of policy and everyday activities of an organization.
Management accounting is concerned with the provisions and use of accounting information to managers within organizations to provide details of the company’s available cash, recent generation of sales revenues, the current state of the organization’s accounts payable and receivable, and much more.