YOGYAKARTA - Accounting plays a very meaningful role in decision-making efforts on economic or financial systems. Interpretation of accounting itself is a data system designed to measure business activities, process information into the form of reports, and communicate the results to management. Want to know the differences in financial accounting and management accounting?
The main role of accounting science is none other than to help management tasks, especially in the role of supervision and planning. Universally, accounting relates to financial problems to money recording activities.
However, in its implementation in the business world there are various types of accounting. Each has different roles and uses. Several accounting categories that are very commonly known by the wider community are financial accounting and management accounting.
Understanding Financial Accounting
Financial accountability is one of the accounting categories related to the preparation of financial reports for several outsiders, such as shareholders, suppliers, creditors, and other related parties.
The financial accounting system is generally intended to control various kinds of transaction records attempted by industry or organizations to prepare transaction financial reports that are established throughout one management period.
Basically, financial accounting is explained as a manifestation of the presentation of a company's financial statements to external parties, both in the form of balance sheet reports, profit losses, capital changes, to cash flows to shareholders, creditors, or investors. These things are specifically related to the profitability and credibility of the company, supplier, or the government.
In order to better understand financial accounting, study conceptual approaches and various practical questions with this topic in the Financial Accounting novels listed below.
Understanding Management Accounting
Broadly speaking, management accounting also presents some information in the form of financial reports, but is more focused on historical information in carrying out management processes that include many things, ranging from planning, organizing, briefing, control and work assessments.
Next, the existing financial reports will be submitted to the relevant parties for
analyzed further. These parties consist of top management, financial manager, production manager, and marketing manager.
These parties take care of several aspects of the company related to the field that is its responsibility. In the analysis process itself, an accurate analysis is needed so that the management can make the right decisions for the company.
Therefore, management accounting financial reports must be made in more detail and detail so that the data provided to superiors can be as detailed as possible.
Financial accountability for its purpose results in financial reports that describe the state and performance of the industry in a certain period. Accounting for destination management to produce reports in particular and in detail, identify issues that arise and resolve these problems.
Financial accountability helps external parties to make decisions that are adrift of the economy and investment so that management performance assessments can be carried out in carrying out their business. On the other hand, management accounting is used to provide financial information for the needs of the management or internal party of the company which is used as an assessment material and decision-making facility for the company.
Financial accountability produces financial reports that cover a certain period of time, for example in a period of one year, half a year, or monthly. On the other hand, management accounting has a much more flexible time span compared to financial accounting, for example every day or weekly.
Financial accountability focuses on past information by providing an overview of the company's management's accountability for the management of the company's funds. On the other hand, management accounting tends to be oriented towards the future.
Financial accountability only measures finance and is guided by the applicable Financial Accounting Standard (SAK). Instead, accounting for management measures finance and operations and physical measurements of processes, suppliers, technology, competitors, as well as customers. This report also has no limit on accounting principles.
You can also learn more deeply by reading our article entitled: 'Recognition of Accounting Programs and their 10 Uses'.
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