Management accounts are a useful tool for your business. This article explains what management accounts are and how they can be useful. It also highlights the key differences between management and financial accounts (also known as statutory accounts.)
the key difference between management accounts and financial accounts is that the former is presented on a more regular basis and is confidential - provided for internal use only. Management accounts are also calculated differently to financial accounts, and are devised to assist in the analysis of component parts of a business. This allows managers to focus on specific business activities and establish any weaknesses and strengths. In comparison, financial accounts are publicly reported financial records of a company used to analyse a business as a whole over a specific period - usually a year. External users of a business, including the authorities, banks and employees, view these records, and by law they should be prepared and presented according to a pre-determined format.