Purpose of Management Accounting

by Jennifer VanBaren; Updated September 26, 2017
Management accounting is used for planning and development of future needs of a business.

Management accounting is a method used to analyze a company’s financial information and to plan for future needs and goals of the business.

Planning

Management accounting is used to plan for future needs of companies by using the financial information they are given to plan budgets and implement strategies to increase profitability.

Directing and Motivating

Directing and motivating employees is a purpose of management accounting. Management accountants serve as liaisons between employees and upper-level management to answer questions and help solve problems.

Controlling

These accountants follow through with plans they’ve developed and make sure they are carried out.

Analyzing

The primary purpose of management accounting is to analyze information. They determine problematic areas and develop ways to correct them. They use the information to develop ways of increasing the company’s profit.

Reports

Most of the goals and plans developed by these accountants take the form of reports. The reports they generate state clearly the conclusions they’ve reached and their recommendations for solutions to problems.

About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.

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