Definition and Application

In general, management accounting presents information in the form of

financial statements related to historical data to carry out management
processes which include many things ranging from planning, directing,
organizing, controlling and evaluating work.

After that, the financial statements will be submitted to related parties to be

seen and analyzed. These parties are top management, financial
managers, production managers and marketing managers. They take care
of aspects of the company related to the field they are working on.

This process requires accurate analysis so that managers and top

management can make the right decisions for the company. Therefore, the
financial statements in management accounting are made in more detail
and detail in order to provide information as detailed as possible to
superiors.

The function of management accounting

financial statements

The existence of financial statements brings many benefits to the

company. The following functions are for companies.

1. Presenting financial statements to meet company

objectives.
Its function is to assist them in conducting reviews related to aspects
within the company such as marketing aspects, financial aspects, and
others. The report will serve as a guide that can help them to plan for
future steps.
2. Identifying financial statements related to
management accounting helps the company to assess certain items
such as product costs, activity costs, and costs incurred in a
department.
The parties that need management
accounting

The importance of management accounting reports makes every company

needs it. In a company, there are several parties who need the report in
order to make plans and decisions related to the report that has been
made. Here are the parties who need the report.

1. Top management
Top management needs information about financial statements from
management accounting to make a number of steps such as,
business expansion, product development, budgeting and investment
policies. Analysis of the report can help them to develop decisions
related to aspects that exist in the company.
2. Financial managers Financial
managers usually need financial related information in a company
such as working capital funding, the cost of funds in working capital,
the rate of return on capital, financial ratios and others.
3. Production Managers
For production managers, they need a report containing details of the
cost of good, total cost of production, cost per unit of product, and
other things. After that, they can make plans related to a company's
products.
4. Marketing manager
To make a marketing plan for a company, a marketing manager needs
a management accounting report that functions to see and analyze
what needs to be addressed. Usually, marketing managers need a
report that includes several things such as sales commissions,
marketing fees, discounted values of products and others.
Given the importance of management accounting reports, every company
needs to make it to report all aspects of the company in detail. In addition
to management accounting reports, every company also needs other things
such as financial statements.