Managerial accounting, sometimes called cost accounting, is a branch of accounting focusing on measuring and analyzing company data to help the managers within that company make better decisions. This differs from financial accounting because while managerial accounting focuses on providing information to people inside of a company, financial accounting focuses on providing information to people and entities outside of a company.
Managerial accounting utilizes information to focus on pricing and cost analysis of a business’ operations, as well as the creation and analysis of company budgets and performance reports. Margin analysis, cash flow planning, production line and sales process analysis, capital expenditure analysis, trend analysis and forecasting, and even product valuation are all tasks that managerial accountants can perform. Using all this data, managerial accountants can confidently relay to managers how the company is operating and performing over certain periods of time.
Many accounting firms only offer financial accounting services. But by also offering managerial accounting services, your accounting firm can add more value to existing and new business client relationships. This can help your firm stand out among the competition, especially from those that only offer one type of service or the other.
Offering managerial accounting services also adds value to your firm. It can improve your revenues, increase your firm’s efficiency, and improve your clients’ decision-making process. It’s something that you should seriously consider, especially if you want your company to grow. The short-term investment needed to create a managerial accounting division and staff is likely outweighed by future financial benefits to your firm over the long run.