What exactly are these reports?
Such ‘Special Management and Group Reporting Services (Controlling)’ are also commonly known as ‘Management Accounting’ and it includes many of the topics found in cost accounting.
Some ‘Managerial Accounting’ subjects focus on computing a manufacturer’s product costs that are required for the external financial statements. For instance, the manufacturer’s income statement must report the actual cost of the products sold, and its balance sheet must report the actual costs in its ending inventories. The ‘Managerial Accounting’ topics required for these calculations include: product vs. period costs, job order costing, process costing, and allocation of manufacturing overhead, costing of joint products, and more.
getsix® are focused on real time business value
Other ‘Managerial Accounting’ topics are more valuable for ‘Planning and Controlling’ your business and in helping management make financial decisions. This is where getsix® add real value. These topics include:
- understanding cost behaviour and cost-volume-profit analysis
- operational budgeting and capital budgeting
- standard costing and variance analysis
- activity based costing
- pricing of individual products and services
- analysing the profitability of product lines, customers, territories, etc.
The correct and relevant amounts for these topics will likely be unaudited, estimated, and future amounts (instead of the past, sunk costs found in the ‘General Ledger’). Management’s focus on these ‘Managerial Accounting’ topics can make a difference in a company’s profitability.
What is the difference between ‘Financial Accounting’ and ‘Management Accounting’?
‘Financial Accounting’ has an emphasis on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company. Courses in ‘Financial Accounting’ cover the generally accepted accounting values which must be followed when reporting the results of a corporation’s past transactions on its balance sheet, income statement, statement of cash flows, and statement of changes in stockholders’ equity.
‘Managerial Accounting’ has an emphasis on providing information within the company, so that its management can operate the company more effectively. ‘Managerial Accounting’ and cost accounting also provide instructions on computing the cost of products at a manufacturing enterprise. These costs will then be used in the external financial statements. In addition to cost systems for manufacturers, ‘Managerial Accounting’ includes topics such as cost behavior, break-even point, profit planning, operational budgeting, capital budgeting, relevant costs for decision making, activity based costing, and standard costing.
Controlling & Reporting – Let us help you drive decisions
‘Controlling and Reporting’ is the collecting, sharing and – most importantly – use of information to assess the performance of different organisational resources and processes – such as sales, operations, human capital finance – in light of business strategies. The key objective is to make available insights in support of profit management by the business.
In any modern business, there is an amazing amount of information ready to be transformed into actionable insights. To unlock its value, you need to determine exactly what data in which form needs to be made available to whom in the organisation. Next-level ‘Controlling and Reporting’, alongside insights like cost to serve, provide you with clear storylines that illuminate the way forward for your business.
‘Controlling and Reporting’ is part of ‘data consumption’ – the last step in the data and analytics process, following data capturing, management and modelling. It concerns only the bare facts, leaving interpretations and next steps to human agents (vs. algorithms or AI).