Cost Accounting vs. Management Accounting

Accounting is the process of keeping detailed records, categorizing and predicting the economic nature of business. It deals with making sure all the accounts of a company are maintained and updated regularly, and all the transactions that take place are smooth. It is a vast subject which covers different topics, some of these are widely used, and two of them are known as Cost Accounting and Management Accounting. The basic definition of the subsequent terms helps in developing a basic understanding of what they are. Cost accounting is a process in which accounts are managed with the aid of data which is received from financial accounting, this is done at the end of every cycle of finance according to a company. Management accounting is different in a way that it gets all the information from cost accounting and financial accounting and then prepares a proper report which is then forwarded to the management for analysis. It can be said that the main aim of cost accounting is to provide information related to costs so that they can be managed according to the budget and decisions can be taken accordingly. On the other hand, the primary role of management accounting is to give detailed information on all the factors such as planning and decision taking along with how the processes go on in the company so that everything can be analyzed and decisions can be made according to these factors. Since it is related to cost, cost accounting only deals with the data in quantitative terms and everything is in the form of money. On the flipside, quantitative and qualitative data are considered in management accounting, along with the data which is not always in the form of figures. The primary function of cost accounting is to make sure all the costs are managed while the role of management accounting is more than just that. It deals with the performance and efficiency, that how things can be made better and more work can be done in shorter time and by spending less money. It can also be said that cost accounting system does not depend on management accounting, but the latter one does rely on the first one along with the financial accounting. Some of the other factors related to this will be discussed in the next couple of paragraphs and differences, in a nutshell, be given at the end.