Management accounting, also called cost accounting, plays a key role in how companies rein in operating expenses and manufacturing costs. Without sound management accounting practices, an organization may be unable to achieve profitability.
Management accounting is a business practice that paves the way for a sound control of manufacturing costs and operating expenses, enabling corporate leadership to chart appropriate strategies for short-term and long-term profitability, according to Accounting for Management, an online management accounting resources portal.
Professionals performing cost accounting work usually focus on cost control, budgeting and manufacturing expense monitoring, says management accounting expert Michael Maher. Management accounting activities also include business performance evaluation and segment reporting.
Management accounting is an important decision-making parameter because it allows organizations to control and measure employee performance and corporate profitability, indicates Accounting for Management.
Corporate personnel involved in conventional management accounting include cost accountants, production planners and accounting managers. To perform the required tasks adeptly, these professionals use cost accounting software, enterprise resource planning software and financial analysis applications, indicates the U.S. Department of Labor's Occupational Information Network (O*NET OnLine).