Financial and management accounts

Uses of management accounting includes enabling 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