3-3 Financial Management and Management Accounting

Relationship between Financial Management and Management Accounting Image
Relationship between Financial Management and Management Accounting;

Relationship between Financial Management and Management Accounting; With the transformation of the modern economic situation, the new concept believes that financial management and management accounting can be gradually integrated and developed, so the overlap and repetition of financial management and management accounting have become an unchangeable fact. Know about Thinking of Accounting Firms for Small Business.

Here are the articles to answer, the doubts about the Relationship between Financial Management and Management Accounting!

This article starts from the similarities and differences between financial management and management accounting, analyzes and compares the two, reflects the mutual learning and absorption between the two, and promotes their respective development together. Secondly, comprehensively analyze the focus and key objects of their work, to define the content of the two.

In the accounting profession, management accounting and financial management are of equal importance, both have deep historical origins, both originated in the 1920s, and have a lot in common in content, both have their own It has its specific research and service objects and development directions. This paper aims to demonstrate the important role of management accounting in the modern economy through comparative analysis and research into management accounting and financial management.

3-1 The similarities between financial management and management accounting;

In the reference book designated by the national certified public accountants, the financial department proposes that financial management is “a part of enterprise management, and is the management work related to the acquisition and effective use of funds”.

This definition highlights that financial management is the management of how funds are obtained and used effectively. After the introduction of western management accounting, some domestic experts believe that management accounting is an emerging discipline, which is generated to meet the needs of enterprise internal management forecasting, decision-making, control, and assessment.

Strengthen enterprise management and improve economic efficiency. It is not only a means to realize the modernization of enterprise management, but also an important content of enterprise modernization management. It can be seen from the above definitions that financial management and management accounting have the same management attributes, and their basic functions are to serve the management of enterprises and meet the needs of enterprise operation and development.

In addition to this fundamental commonality, financial management and management accounting have the following similarities: from the perspective of method system, management theory, and management process, both are carried out in the order of planning, decision-making, execution, and control; two The source of the information analyzed by the readers is the financial and accounting data of the enterprise; the data and report texts and other text carriers generated in the management of the two have no legal effect, and almost no legal responsibility is assumed externally; the two are mainly based on the enterprise’s Operational reality, to take certain measures to actively promote the development of enterprises.

3-2 The difference between financial management and management accounting;

Financial management and management accounting has developed today, and the differences between the two are particularly obvious. The most fundamental difference between the two is that the main content of financial management is to manage funds, and the focus is on how to obtain more funds at a lower cost and how to use funds more efficiently.

Financial management is an important link between the external environment and enterprises and is closely related to the operation of financial markets. Management accounting is about the operation and management information system of an enterprise. It is necessary to consider not only how to use funds efficiently, but also how to best allocate the materialized funds in operation and management activities.

Management accounting also realizes the management of talents through performance evaluation, responsibility accounting, and control accounting, and efficiently allocates talents, resources and positions through effective arrangements, thereby improving the operation and management efficiency of enterprises. The concept of time value in financial management introduces the relevant content about cost and profit in economics, which affects the management and economic benefits of enterprise operation.

And management accounting has continuously absorbed many theories and methods in its development process. These theories and methods can also be digested and absorbed by financial management. In addition, the incentive theory and entrustment theory absorbed by management accounting has a great inspirational effect on financial management activities and performance evaluation in economic practice and are worth learning from.

3-3 Solutions to the intersection of financial management and management accounting;

The general principle in the process of dealing with this problem is: first of all, the repetition rate of the teaching content between the two courses should be minimized, the learning efficiency and interest of students should be improved, and various knowledge points should be coherent according to the requirements of practice, to establish a complete body of knowledge. Therefore, the author thinks that the content of traditional management accounting should be integrated with financial management courses, or directly merged into a financial management course.

From the current development trend, emerging management accounting has gradually become an independent discipline. At the same time, traditional management accounting and financial management are the same in terms of research purposes, objects, characteristics, and reflected content, which is also the basis for the integration of the two.

Combining these two courses into one course has many advantages:

  1. It is beneficial to reflect the theoretical relationship between the two as a whole, to form a complete theoretical system;
  2. In the arrangement of practical training courses, the relevant After the content is integrated, the training can make the students better grasp the content and essence of enterprise fund management, make it more realistic, and improve the training efficiency and interest of the students.

Conclusion;

For an enterprise, both financial management and management accounting are the needs of internal management. It can effectively manage the entire process of the enterprise’s production and operation activities, improve the efficiency of the use of funds, and maximize the economic benefits of the enterprise. Although the relationship between financial management and management accounting is still at the stage of the debate, the differences between them can still be distinguished from different perspectives. Although they have different divisions of labor, they are of great significance to the long-term development of enterprises.

Relationship between Financial Management and Management Accounting Image
Relationship between Financial Management and Management Accounting; Photo by Beatriz Pérez Moya on Unsplash.
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