Financial accounts | Management accounts |
Detail the performance of an organization over a defined period and the state of affairs at the end of that period. | Used to aid management to record, plan and control activities and to help the decision-making process. |
Limited companies must, by law, prepare financial accounts | There is no legal requirement to prepare management accounts |
The format of published financial accounts is determined by law and by accounting standards. In principle the accounts of different organizations can therefore be easily compared. | The format of management accounts is entirely at management discretion: no strict rules govern the way they are prepared or presente |
Financial accounts concentrate on the business as a whole, aggregating revenues and costs from different operations, and are an end in themselves | Management accounts can focus on specific areas of an organization’s activities. Information may aid a decision rather than be an end product of a decision. |
Most financial accounting information is of a monetary nature | Management accounts incorporate non-monetary measures |
Financial accounts present an essentially historic picture of past operations. | Management accounts are both a historical record and a future planning tool. |