Management reporting has several differences from accounting reporting. Let's look at each of them in more detail.
Practical significance
Accounting is a source of information for calculating the tax base, which is then sent to the Federal Tax Service. In addition, accounting information is used in management accounting. But in order for this data to participate in decision-making, it must be supplemented with non-financial information.
The management report is documentation that is only necessary for internal use, i.e. this data is not transferred to any third party. Based on this information, operational decisions are made, all business risks are controlled.
Efficiency
The head of the organization makes decisions daily and more than once, so he must have a real picture of the state of affairs of the company. To do this, it is necessary to establish a process for promptly receiving information. In management accounting, the speed of receiving data is primarily important, even if their accuracy is slightly distorted.
Differences between management and accounting balance sheets
Source: shutterstock.com
Quick reports that are updated in real student data package time may contain approximate data. Accounting documents exclude approximate data, as do planned management reports (weekly, monthly, quarterly and annual). They must contain the most accurate information.
Customization
Since the management report is an internal document, there are no generally accepted rules for its formation. The company itself decides who will prepare the report, what indicators it will include, what it will look like, etc. It is only important that the manager understands the information that the employees have prepared for him.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's target audience
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153318
Detailing
On the surface, a picture emerges that points to a weak connection between management and accounting. But in reality, this is not the case at all, because the former is compiled on the basis of the latter. But management accounting contains deeper and more detailed data.
For example, the objects of management accounting are not only the general flow of funds of the organization, but also the individual indicators of each department or employee, as well as data for each product group.
Forecasting
With the help of management accounting, it is possible to find out not only the current state of affairs of the company, but also to track the development of the business in dynamics. All this allows making quite reasonable forecasts. For example, when analyzing previous periods of work, top management can determine how the enterprise depends on seasonality, and on this basis forecast costs and revenue for the upcoming period.
When drawing up a balance sheet, management reporting significantly increases the analytical capabilities of the organization. The management not only correctly predicts the further