Management accounts are a set of data that is usually presented on a regular basis, such as every fortnight or once a month, to the management staff of a business or organisation. The information helps managers to record, plan and control the financial activities of a business or organisation, and to aid them in making the right decisions for the company.
The information collected in management accounts is most useful to managers, investors, tax authorities, and other stakeholders in order to make resource-allocation decisions within companies, organisations, and public agencies.
What is an accountant?
An accountant deals with finances on someone else’s behalf. They need to be highly skilled in keeping track of business records, audits, and inspecting the financial records (mostly the transfers of capital or income) of individuals or business concerns. They also have to be able to create and prepare financial reports.
The more money an accountant earns, the more responsibilities they tend to take on, as well as being responsible for larger accounts for larger corporations. For example, some accountants are responsible for examining the tax implications of transfers made by a company. In addition accountants must be comfortable with numbers, but also spend a considerable amount of time reviewing other people’s work and, sometimes, delivering bad news to their clients.
Financial accounts and management accounts
There are a few key differences that divide financial accounts and management accounts. Management accounts tend to look towards the future, and are based on models and projections to help managers make informed decisions. Financial accounts are generally focused on the past.
Management accounts are usually kept private, whereas financial accounts are published to the stakeholders and even the public as evidence of how a company has performed.