The importance of management
Although it is not legally mandatory to present the information related. The management accounting of the company. accountancy business and management. The companies have begun to use it in their daily activity.
And it is a type of information reserved for internal users. As it is responsible for the analysis of costs and. Therefore, helps to make decisions related to the process of management and control. Its importance in the 21st century is beyond doubt since. It provides quantified information for the analysis and control of costs that could not be obtained in any other way.
It is also known as cost accounting. Especially by students of careers related to administration and business management and economics. Because its origin was in need of knowing data that quantify the factors of production.
The objectives of accounting business and management
Management accounting has a triple objective. On the one hand, to know what the costs of the company are. On the other hand, to support decision- making based on “this information and, finally, to facilitate the process of control and planning.”
In the absence of rules governing management accounting and, therefore, given that each company can issue the reports with the structure it deems appropriate. Management accounting should be presented in an appropriate manner to help in making decisions. And help in the control and planning of the company.
“To do this, the reports must contain both current information and past or historical information to facilitate comparison and serve to assess whether the decisions made in the company have” served to achieve the objectives of the same. Accountancy business and management.
Complements financial accounting
Many people who might ask: but, does not only financial accounting serve the purpose of making decisions? The answer is that it can be, although the objective of both accounting is different. Thus, while financial accounting is legally regulated. And must be presented in accordance with the Spanish General Accounting Plan. The structure of cost accounting is carried out in the way that the company considers most appropriate.
In fact, management accounting starts with financial accounting (of inventory costs, raw materials and, in general, of all costs of the company). And feeds each other to guarantee the reliability of the information, its comparison, and its relevance. Accountancy business and management.
While financial accounting is generic information of the company. And referred to the company as a whole. Cost accounting is disaggregated information. Adapted to the demand of users of this information and mainly oriented to the future.
Therefore, it can be said that management accounting complements the information in financial accounting, and helps to verify it.