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  • Honey Hive Bookkeepers

What is Managerial Accounting?

Managerial accounting is also called cost accounting and deals with the information that people within an organization use to manage and run the business.

Managerial accounting is the key to understanding your company's financial information and properly managing it. Because providing information to outside parties that is confidential and/or considered a trade secret would be damaging to a company financial accounting is limited in the information that it provides. It does not provide enough information to strategically run a company. But that seems to be what many small and medium sized businesses use in the running of their company. From profit and loss statements to balance sheets there is simply not enough information for a business owner to determine what their best financial moves are to grow their company and become more profitable.

This is where managerial accounting steps in. Managerial accounting involves taking various costs and putting them into different classifications. Based on the classifications their behavior to different changes can be predicted and budgets and projections can be performed. Based on the budgets and projections for various scenarios business owners/managers can have a more strategic look at the business decisions they are planning on making.

We work to provide managerial accounting reports to our clients rather than simple financial accounting reports. After all you've already invested in your company, you need information to run it successfully.

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