Importance Of Management Accounting

Management accounting determines specific goals and objectives of the business organization. It sets future targets of the organization.

Proper planning is necessary to achieve business goals and objectives. Management accounting helps to make plans and policies through which desired goals can be achieved or targets can be meet.

Effective controlling system is needed to achieve desired business targets and objectives. Management accounting applies variance analysis technique to compare actual result with desired or standard performance. Corrective actions are taken if variation found between actual performance and the standard set by the organization.  

Management accounting helps to increase business efficiency and productivity by setting targets to different sections and departments. Their efficiency is regularly measured by using different tools and techniques.

Management accounting helps to maximize profit by reducing wastage and controlling excess expenses. It tries to improve productivity and efficiency in minimum cost.