management accounting
Definition
Process of preparing management accounts that provide accurate and timely key financial and statistical information required by managers to make day-to-day and short-term decisions. Unlike financial accounting (which produces annual reports mainly for external stakeholders such as creditors, investors, and lenders) management accounting generates monthly or weekly reports for the firm's internal audiences such as department managers and the chief executive officer. These reports typically show the amount of available cash, sales revenue generated, amount of orders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and in-process inventory, and may also include trend charts, variance analysis, and other statistics. Also called managerial accounting.
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