Understanding and Benefits Management Accounting in Company

Management accounting is the result of a combination of two things, namely accounting and management. Even though the two terms are different, they are related to each other. Accounting is a system that regulates the finances of a company which is run by managers. Meanwhile, management is the science of planning, building, mobilizing and supervising an organization or company.

Understanding and Benefits Management Accounting in Company

Definition of Management Accounting

Accounting is very important for companies to manage and oversee all financial information properly. Management accounting is one type of accounting that exists in a company that is related to the use and calculation of accounting for company management to provide business decisions for the company and to be better equipped to manage and carry out financial control functions.

Management Accounting Functions

Analytical Tools in Decision Making

The first function is as a basis for decision making based on qualitative and quantitative data. Accounting itself is needed because there is important information for companies related to corporate strategy by relying on valid data.

Relevant Sources of Financial Data and Information

This accounting also serves to provide applicable financial data. The reports that will be used are used as a source of data in both budget planning and activities for the coming period and as a basis for the company's operational costs. Of course, data and information will be validated first on the basis of mutual agreement between internal and external parties.

Management Level Accountability

In the company, all divisions and regions have the same responsibilities in accordance with their job descriptions. The accounting process is needed as a source of information to support the work of each division. Not only for the benefit of the personal division, this data can work together with other divisions so that good, planned and consistent cooperation can be established.

Monitoring Company Performance

Management has control measures over the company's activities. This accounting process also works together as well as forms the basic control, namely financial data. The monitoring and control will later be used as evaluation material to see whether the business process is running optimally or not. Thus, the company's business processes can be better than what they are today.

As  Audit Archive

Sometimes there are things that affect the business and require all evidence of financial transaction requirements to be audited by interested parties. Therefore, the accounting calculation process must be handled properly by auditors who have high accuracy and ability.

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