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Financial and managerial accounting differ. But both are vital for decisions. Yet, I argue that managerial accounting has many uses. Financial accounting records, organizes, and reports a company’s financial transactions and performance over a period of time. The goal is to give a clear and consistent view of a business’s finances. 

In contrast, managerial accounting is a process. It analyzes an organization’s financial data and interprets the results. This helps leaders make better decisions. The goal of management accounting is to boost an organization’s performance. It provides financial info to internal managers to do this. This form of accounting measures the effectiveness and costs of different value streams. It also checks their performance. Management can gain key insights by analyzing product lines, location costs, pay metrics, or any expenses. Also, this accounting style is not bound by strict GAAP. The reports are for the organization’s internal use. Given these functionalities, managerial accounting is likely to be more effective in enhancing cost performance, operational productivity, and other essential performance indicators. One could argue that, relying only on managerial accounting methods can aid strategic decisions.

The organization needs both types of accounting to excel. But, managers can focus on only managerial accounting to run their operations.