Managerial accounting is able to meet the needs of both departments by offering information in whatever format is most beneficial to that specific need. The key difference between managerial accounting and financial accounting relates to the intended users of the information. Since managerial accounting is different than financial accounting, this goes beyond just revenues and expenses.
Managerial accountants analyze and relay information related to capital expenditure decisions. This includes the use of standard capital budgeting metrics, such as net present value and internal rate of return, to assist decision-makers on whether to embark on capital-intensive projects or purchases. Managerial accounting involves examining proposals, deciding if the products or services are needed, and finding the appropriate way to finance the purchase. It also outlines payback periods so management is able to anticipate future economic benefits.
The main difference between managerial accounting and financial accounting is the parties for which they provide financial information. Managerial accounting varies from financial accounting in terms of its purpose. It provides internal managers or employees with useful insights that assist the organization’s management in planning strategic operations. Management accounting is the process of analyzing information about a company’s finances, interpreting it and using it to make decisions about the business. Using financial accounting, managers can get insights into a company’s past or current finances, but it’s managerial accounting that allows them to translate this insight into actionable analysis.
This text is very easily divided (or reordered) into modules to suit different teaching objectives. I teach several of the chapters “out of order” so that I bring in some concepts early in the semester. This is managerial accounting another advantage of this text – the concise presentation of most of the topics make it easy to subdivide and reorder. The structure of chapters, practice problems, examples, all follow a consistent pattern.
At the Robins School of Business, Joe teaches fundamentals of financial accounting, intermediate financial accounting I, intermediate financial accounting II, and advanced financial accounting. He earned his BA degree in accounting from Duke University and his MA degree in business and economics, with a minor in education, from Appalachian State University. He has written numerous articles and continues to make many presentations around the country on teaching excellence.
