For a definition to be effective and achieve its primary purpose which is to shed light on some ambiguity; So, a picture perhaps? They say a picture is worth a thousand words and since my editor will not give me that luxury lets paint that picture shall we? But how does a picture accomplish the tricky business of time management definition?

Enter life management as background. Life management is how we manage our health, finances and social interactions. All these are a product of our personal productivity which will dictate how well we eat, how long we sleep spend time with our families and friends.

Personal productivity is itself a factor of a skill set that one has to perfect to achieve these desired results. These skills are things that are inherent in us but which need to be fine tuned. Our ability to learn new things. The propensity to handle stress and control our minds. Good organizational skills, sound decision making, and the secret ingredient to stellar personal productivity and my personal favorite Time management!

Time management is part of personal productivity. However, time management is also the sum of a separate set of skills.

Goal management is critical as we are basically directionless as long as we have no goals. As is the case with most people we have several goals that we would like to achieve but without a task management system we end up not doing most of these things. It is imperative to know what needs to get done!

Prioritization becomes a necessary skill in dispensing with the most important things first. Well all these things ca not get done at the same time right? That is why some clever chaps came up with the modern calendar on your phone. Use it to make sure you are always doing what needs to get done!

There are two more skill sets that are crucial to nailing time management. These are managing procrastination which we all know all too well and having a follow-up system to ensure that every activity we undertook came to a conclusion regardless of the eventual out come of the said project! I will accept your accolades now on an effective time management definition.

This article deals with a brief overview of some of the differences between financial accounting and management accounting systems. But at first let us understand what accounting is.

What is accounting? Accounting may be defined as a system of collecting, summerising, analysing, and reporting in financial terms, information about a business organisation. The business accounting as understood today, comprises of, financial accounting, and management accounting. These two parts of the business system have something in common and there are differences as well.

As a part of the accounting system of business enterprises, these two differ from each other in many respects.

The first difference is in its structure or formats of its presentation of information. Financial accounting has a single unified structure of presentation, which means, that the information relating to enterprise business system is presented more or less on a uniform basis. The end products of financial accounting are its three basic financial statements, and these are:

– The balance sheet.

– The profit and loss account/income statement.

– The statement of changes in financial position.

The balance sheet presents the financial position of an organisation at any point of time. The profit and loss statement would contain the organisation’s financial performance over a specified period of time, which is usually one year. The inflow and outflow of financial resources of an organisation during a period of time is reported in the statement of changes.

The financial statements prepared are based upon an equation or model, which implies, that all organisations present their financial statements on basis of a uniform structure. This would mean that financial accounting has a unified structure.

Primarily, financial statements are usually meant for people outside the organisation, such as, shareholders, creditors, government, the general public, and like others. These people also get such reports from other organisations, and to maintain uniformity in these statements, financial accounting system uses a unified structure system.

On the other hand, management accounting is mainly concerned with the in-house management. Since the accounting statements are used internally, it varies in structure from organisation to organisation, depending upon the circumstances and requirements of individual use. Therefore, management accounting is tailored to meet the needs of the management of the particular organisation.

The next difference is in the generally accepted accounting principles. Financial accounting is prepared in accordance with the Generally Accepted Accounting Principles, which in short is known as GAAP. Preparation of financial statements following GAAP ensures that the account presentations have been prepared on basis of a norm, as per the general guidelines issued by law.

On the other hand, management accounting is an in-house requirement, and is for the exclusive use of the management of the organisation. These management accounting statements are never made available to the outsiders, and hence could be formulated in the manner as wanted by the in-house management.

The third difference between financial accounting and management accounting is the statutory requirement of preparation of accounts. As discussed above, financial statements are prepared solely for the people outside the organisation, who have interests in the business operation of the organisation. There are shareholders, who would use the information contained in the financial statements, to decide whether or not to invest in the organisation. By law it is mandatory to prepare such statements, and it is a statutory obligation. In fact, the company law not only makes it mandatory to prepare such accounts, it also has laid down the structures, based on which such financial statements need to be prepared.

The fourth difference is the reflection of historical accounts. As mentioned above, there are three types of financial accounting statements that are prepared. Within these three, while the balance sheet and the profit and loss account, report the financial position on a particular date, and the results of operation of the organisation during a specific period of time respectively, the statement of changes of the financial position reports the inflow and outflow of resources during a particular period of time. Therefore, financial statements record historical data. On the other hand, management accounting does not record any financial history of the organisation.

The fourth difference relates to segment reporting. Financial accounting pertains to the business as a whole, though some organisations segment such accounting for its different operating centres. But, as and when the financial statements are presented, it shows the business as a whole. Contrary to this, the management accounting system may present statements in segmented fashion.

Finally, the financial accounting and management accounting differs in respect of their ultimate objectives. Financial accounting is prepared specifically for external reporting, where-as, management accounts are solely for in-house use.

In this brief presentation, it has become quite clear how financial accounting differs with management account preparation. Both of the accounting systems are vital to any business scenario, and are mandatory requirements in a corporate environment.