Financial and management accounts
Uses of management accounting
Management accounts will allow you to:
- Compare your accounts with original budgets or forecasts
- Manage your resources better
- Identify trends in your business
- Highlight variations in your income or spending which may require attention
They should be used for the following:
Record keeping
- Recording business transactions
- Measuring results of financial changes
- Projecting financial effects of future transactions
- Preparing internal reports in a user-friendly format
Planning and control
- Collecting cash
- Controlling stocks
- Controlling expenses
- Co-ordination and monitoring of strategy/performance
- Monitoring gross margins
Decision making
- Using cost information for pricing, capital investment and marketing
- Evaluating market and product profitability
- Evaluating the financial effect of strategies and plans