Cost accounting and management accounting, the difference?
To see how the two types of accounting differ, we’ll look at their definitions and more closely at the ways in which they are used in business management.
Cost Accounting
Is the process of tracking, recording, reporting, and analyzing all the costs associated with creating a product or offering a service. It looks at both direct, indirect, fixed, and variable costs in addition to the costs associated with every step of your business’s operations. Using actual, historical financial data, cost accounting aims to calculate, control, and reduce costs.
Management Accounting Fundamentals
It looks at every aspect of a business’s financials and operations, including its costs, to offer not just a quantitative analysis, but also a qualitative analysis to help facilitate better decision making and improved business strategy based on both historical data and projected figures.
Key Differences
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Management accounting provides a bigger financial picture, historical data, and future financial projects that inform decision-making and strengthen business strategy.