Talking Cents

Small business accountants in Melbourne explain the difference between financial and managerial accounting

Financial and managerial accounting serve two distinctive career paths that our small business accountants in Melbourne will explain to you in this article. In summary, financial accounting refers to the collecting and processing of information into financial statements, whereas managerial accounting refers to the internal processes used to account for business transactions. Some of the differences between the two fall into the following categories:

Aggregation: Our business accountants in Melbourne identify that financial accounting reports on the results of an entire business, whereas managerial accounting reports at a more detailed level, such as profits by product, customer type or location.

Reporting focus: As financial accountants create financial reports that are distributed both within and outside of a company, managerial accountants are more focused on operational reports that are delivered only within the company.

Time period: Financial accountants gather historical information regarding the financial results that a business has already achieved, while the managerial accountants at our small business accounting services in Melbourne are also concerned with budgets and forecasts in order to address the future orientation of a specific business.

For more information on financial and managerial accounting, please contact our small business accountants in Melbourne today.