Difference between Financial and Managerial Accounting

Explore the key Difference between Financial and Managerial Accounting, the purpose, needs, time, for both of them. Learn about the wide range of career opportunites and upskilling options.

Transcript

1. Difference Between Financial and Managerial Accounting
2. What is Financial Accounting? • Records and reports past financial transactions • Used mainly by external users (investors, lenders) • Must follow rules like GAAP/IFRS • Shows the financial position of the company
3. What is Managerial Accounting? • Provides financial information for internal decision-making • Future-focused (planning, forecasting) • Does not follow GAAP/IFRS • Used by managers to run the business
4. Purpose Financial Accounting: To show company performance to outsiders Managerial Accounting: To help managers plan, control, and make decisions
5. Time Focus Financial Accounting: Focuses on past performance Managerial Accounting: Focuses on future plans, budgets, forecasts
6. Users Financial Accounting: Investors, lenders, shareholders, government Managerial Accounting: Managers, department heads, internal teams
7. Rules & Standards Financial Accounting: Must follow GAAP/IFRS standards Managerial Accounting: No formal rules; flexible reporting
8. Examples of Financial Accounting Reports • Income Statement • Balance Sheet • Cash Flow Statement
9. Examples of Managerial Accounting Reports • Budgets • Cost Analysis • Profit Planning • Forecast Reports
10. Upskilling for Accounting Students & Professionals To improve in both financial & managerial accounting: • Learn Advanced Excel (VLOOKUP, Pivot Tables, Power Query) • Practice Financial Statement Analysis • Learn Budgeting & Forecasting techniques • Study Costing methods (ABC, Standard costing) • Use ERP tools like Tally, SAP FI/CO, QuickBooks • Learn Power BI for data visualization • Improve communication & analytical thinking
11. Upskilling Section If you are a student or a working professional planning to start or switch your career to accounting, you can upskill by learning different accounting courses online or by joining accounting courses in Calicut offered by reputed institutes. These courses help you gain practical skills in GST, Tally, SAP, financial reporting, and tax filing, making you job-ready for accounting and finance roles.
12. Career Impact of Upskilling • Better understanding of company performance • Higher chances of roles like: a. Financial Analyst b. Management Accountant c. Cost Accountant d. Business Analyst • Improved decision-making and problem-solving skills • More job opportunities in finance and corporate sectors
13. Summary of Differences • Financial: External, past-focused, rule-based • Managerial: Internal, future-focused, flexible
14. Thank You!