{"id":644,"date":"2021-08-16T04:22:48","date_gmt":"2021-08-16T04:22:48","guid":{"rendered":"https:\/\/www.agilisbooks.com.au\/?p=644"},"modified":"2021-08-16T04:55:17","modified_gmt":"2021-08-16T04:55:17","slug":"whats-the-difference-between-financial-accounting-and-management-accounting","status":"publish","type":"post","link":"https:\/\/agilisbooks.com.au\/?p=644","title":{"rendered":"What&#8217;s the Difference between Financial Accounting and Management Accounting?"},"content":{"rendered":"<h2><span style=\"color: #99cc00;\"><b>Do you know the difference between a Financial and Management Accountant? If you\u2019re keen to grow, switching to the benefits of management accounting could have a huge impact on your business\u2019s future destiny. Agilis Books can help with this.<\/b><\/span><\/h2>\n<p><!--more--><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-645 aligncenter\" src=\"https:\/\/agilisbooks.com.au\/wp-content\/uploads\/2021\/08\/Agilis-Books-AUGUST-Blog-Image-300x200.jpg\" alt=\"\" width=\"300\" height=\"200\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">As a business owner, you know the legal requirements surrounding producing accounts and submitting tax returns \u2013 but do you truly know why you\u2019ve engaged an accountant, and understand the value that a good accountant and business adviser can add to your company?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are a business owner, managing director or CEO, there are three main areas of the accounting proposition that you\u2019re probably most interested in:<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #99cc00;\"><b>1. Compliance Work<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This is the bookkeeping, financial accounting and tax work that\u2019s legally required for you to be compliant with the law. Overall, this compliance work looks backwards at your numbers from the past (your \u2018actuals\u2019), showing you where you have been, rather than where you are going.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #99cc00;\"><b>2. Financial Performance Work\u00a0<\/b><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This is the work that aims to improve the financial health of your business. It includes the cash flow, cost management and funding work that helps you to strengthen your balance sheet, manage your working capital and become a more stable financial proposition. The work is based on your historic actuals but also has an element of forward-looking forecasting and projections.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #99cc00;\"><b>3. High-Value Advisory Work\u00a0<\/b><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This is the forward-focused, high-level strategic advice that helps you look to the future and plan out your business. This can include helping you to define your personal and business goals, create a 5-year business plan, manage your company strategy, and focus on growth, value and an eventual exit strategy etc.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><b>How does a Management Accountant differ from a Financial Accountant?<\/b><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">To make a success of your business, and to get the best value from your accountant, you need an adviser who can deliver in all of these three areas. However, not all accountants are the same. It\u2019s important to understand the difference between a Financial Accountant and a Management Accountant.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the most basic level, these are the key differences:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Financial Accountant\u00a0<\/b><\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">In general, a Financial Accountant focuses on the basic compliance work, with a small amount of financial performance work thrown into the mix. They make sure your bookkeeping is done and dusted, will file your tax returns, and use your historic numbers to produce statutory accounts. They\u2019re \u2018bean counters\u2019, making sure you have a clear record of all the beans you\u2019ve produced.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Management Accountant\u00a0<\/b><\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">A Management Accountant, however, looks forwards rather than backwards and has a greater focus on the future. They will usually provide the compliance work too, but will delve deeper into the financial performance and high-level advisory work. Rather than just \u2018counting the beans\u2019 they help you choose the right beans, decide how to plant them and make sure you nurture and grow these beans to bring in a better (and more profitable) harvest.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><b>How does a Management Accountant deliver more value?<\/b><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Looking to the future is a far more productive way of managing your finances than just counting what\u2019s in the bank. A Management Accountant will empower you to understand your business, and will give you the tools and the knowledge to make good, well-considered decisions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This additional help can be invaluable. With an experienced Management Accountant working alongside you, your financial thinking can be completely revolutionised.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">For example, you will:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Stop looking backwards<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 your focus will be all about looking forwards to what you can change, not just recording your past transactions (the things you can\u2019t now change, even if you wanted to).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Know your numbers inside out<\/b><\/span><span style=\"font-weight: 400;\">\u00a0\u2013 you\u2019ll have a far better understanding of your regular finances, thanks to the detail included in your regular monthly management accounts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Get in control of your cashflow<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 you\u2019ll be able to drill down into your cash inflows and outflows and, by doing so, improve the liquid capital and cash flow in the business.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Streamline your financial processes<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 you\u2019ll refine and improve your internal accounting procedures, so you\u2019re more efficient and more productive.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Refine your pricing strategy<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/span><span style=\"font-weight: 400;\">\u2013 by reviewing your pricing model, you\u2019ll be able to enhance your margins, boost revenue and make the whole company more profitable.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Stop unnecessary expenditure<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 you\u2019ll analyse your overheads, expenses, and cost base to reduce the money that\u2019s leaking out of the business.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Bring more money and investment into the business<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 with more robust accounts and projections, you\u2019ll have better access to funding and to private investment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Get a firm grip on your business data<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 with meaningful metrics being tracked and monitored through your cloud accounting platform, you\u2019ll greatly enhance your business intelligence and the evidence behind your decision-making.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #99cc00;\"><b>Improve the quality of your advice<\/b><\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">\u2013 you\u2019ll always have an adviser on hand, giving you access to your management accountant\u2019s knowledge, experience, and advice.<\/span><\/li>\n<\/ul>\n<h3><\/h3>\n<p>&nbsp;<\/p>\n<h3><b>Talk to us about the benefits of Management Accounting for your business<\/b><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re ambitious and keen to grow, switching to the benefits of management accounting could have a huge impact on your business\u2019s future destiny.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A Financial Accountant looks backwards, while a Management Accountant looks forwards, and it\u2019s this key difference in focus, ability and oversight that makes partnering with a firm of management accountants so rewarding.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Agilis specialises in both Financial and Management Accounting.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Not only can Agilis Books take care of your bookkeeping and software needs, but our accounts department can report to you on a daily, weekly, or monthly basis!\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Moreover, one of our business division partners \u2013 Agilis CA, specialises in <\/span><a href=\"https:\/\/www.agilisca.com.au\/services\/business-planning-advisory\/\"><span style=\"font-weight: 400;\">Business Development services<\/span><\/a><span style=\"font-weight: 400;\"> designed to take your business to the next level through business planning, growth and advisory.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you want to engage in both Financial and Management Accounting, <\/span><a href=\"https:\/\/agilisbooks.com.au\/contact\/\"><span style=\"font-weight: 400;\">contact Agilis Books<\/span><\/a><span style=\"font-weight: 400;\"> today!<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>This blog was originally published by BOMA, but has had edits made by Agilis Books for the benefit of our readers. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Do you know the difference between a Financial and Management Accountant? If you\u2019re keen to grow, switching to the benefits of management accounting could have a huge impact on your business\u2019s future destiny. Agilis Books can help with this.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[9,4],"tags":[],"class_list":["post-644","post","type-post","status-publish","format-standard","hentry","category-accounting","category-small-business"],"_links":{"self":[{"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=\/wp\/v2\/posts\/644","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=644"}],"version-history":[{"count":0,"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=\/wp\/v2\/posts\/644\/revisions"}],"wp:attachment":[{"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agilisbooks.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}