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Management vs. Financial Accounting

Management vs. Financial Accounting
Management Vs. Financial Accounting Management Accounting : The process of preparing management reports and accounts that provides accurate and timely financial and statistical information to the management Financial Accounting : The purpose of accounting is to provide the information that is needed for sound economic decision making concerned with classifying, measuring and recording the transactions of a business. What is Management Accounting: Management accounting is the updated version of what you call financial accounting and the most circulated term in corporate business arena. Management involves planning, organizing, staffing, leading and controlling the resources available in an organization, namely the physical and human resources. Much importance is given to personnel management as they are the priceless assets of any organisation.But it is equally important for a firm to record all its business transactions for future reference and tax audits. Thus the necessity of accounting comes into the fray. Financial Statements Made Easy Functional Difference: Well, accounting means something to do with finance. So, what is the big difference, if it is financial or management accounting? One difference is in the title, and the other in their function. The rationale behind financial accounting is statutory, done for the benefit of shareholders, customers, government regulatory agencies, other external agencies, potential investors and the like. It records all business transactions that are purely monetary in nature and no further analysis is done. Essential for Management Planning: Management accounting is voluntary and reports are prepared to meet the internal needs of management. We talked about planning, for which interpretation and analysis of such quantitative data and other inputs becomes necessary to plan for future needs of management. The main functions being attention direction and problem solving, management accounting is primarily concerned with providing information relating to the various aspects of a business, like cost or profit associated with some portions of business operations. It employs techniques such as standard costing, budgeting, marginal costing, break- even analysis and so on., Inputs also stem from industry data, competitor data, published reports by public and private agencies and research studies findings, thus widening its scope for improvement in business operations. Financial Accounting: Financial accounting is restricted to deal only with “generally accepted accounting principles” and any deviation is considered to be errors for correction. Though it provides valid and authentic information, it lacks timeliness. The former restricts the accountant to a mere book-keeper while the latter transcends the role of the accountant to that of total business information technologist. Here he becomes an evaluator of different functional areas like marketing, production, purchase and personnel. As modern business is huge in size, complex, diversified and decentralized in terms of operations, financial accounting just does not fill the bill, as information is required as when an event happens at various hierarchical levels of an organisation. This infographic from Goodaccountants.com  details the industries that employ the most accountants and auditors, and the results are very interesting!  Management accounting is inter disciplinary in character and derives inspiration from organizational theory, economics, behavioral sciences, statistics and management. Although the paraphernalia required for management reporting is complex and expensive, it is worth the try, as it tries to compare and contrast the actuals with the standards and bring out variances if any. This is quite useful in determining the cost-effectiveness of a particular project or to be prepared for suitable action. Management accounting is nothing but a management information system where the managers have to be techno-savvy in order to handle the total information resource and project it suitably to the management to take timely actions for the increase in growth, profit and sustainability of the...
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Leader vs. Manager

Leader vs. Manager
LEADER VS. #manager– WHAT IS THE CONNECTING THREAD? Who is a Leader? A leader is always looked up to, by his #followers as they are truly inspired by his #personality, #behavior and the #power of his #words and #actions. The #intellectual #ability of a leader is definitely on the higher scale than a non-leader and also the perceptual ability and decision making skills are amazing. The main idea of pondering over leadership is that how the qualities of a leader make him more #successful and how those unique qualities can be acquired by a manager of a firm to influence a group towards achievement of goals. What makes a leader unique? Every individual is bestowed with at least one special quality that makes him unique. A leader obviously is inherent with so many good #traits and qualities that influence others and the best part of the story is that he understands his own potential and employs the right skills at the right time. It is basically a personal quality of #character in a man that influences the behavior of others in a productive manner. Top 10 qualities of an effective leader; A man of #charisma-the followers should be attracted by his magnetism and willingly contribute to the cause Should have a clear idea of future plans-Here he differs from the manager who is concerned more about the #productivity Should be #action-oriented, dare to achieve the impossible Should be tough at heart -stick to his principles and not a victim to circumstances Should be #flexible, when it comes to the #welfare of his people Maintain #integrity and #humility #value-driven to gather trust #open and #honest in his endeavors #creative-the ability to think out of the box Should possess sense of humor that makes him an affable person and even serious issues can be dealt with ease Is Manager a Leader too? Is it necessary that a manger has to be a good leader too? Of course yes. By virtue of being selected for the post of the manger, a person cannot manage the show. Unless he possesses the true qualities of a leader he cannot pull the strings tight and lead the organization in the right track. Without the right elements of leadership, he merely becomes a care-taker enjoying his pay and perks. He will not be liked by his #subordinates if he doesn’t have that drive to make a mark of himself as an assertive person and in due course of time either he becomes the entertainer of the firm or he loses his integrity, both of which is not good for the organization’s #efficiency and productivity. Roles of an efficient manager: A manager has the necessity to prove himself in terms of #planning, formulating strategies, successful completion of targets, increased #production, increased sales, acquisition of more orders, managing his team without much #conflicts and above all make the team to abide by and obey his rules. A manager to be a successful leader need not be #aggressive to prove his point but tough and determined to get things done. Big corporate firms frame ‘systems’ which are nothing but templates of action incorporating all the elements needed for execution in a tailor made fashion. A manager has to now focus on the strategic elements of #management since the technicality is being taken care of by the systems. What is the right management approach? Managers expect subordinates to nod their heads in approval to whatever they say. This not the right approach; there should always be a reciprocal relationship between both the parties as in the case of a leader and his followers. A give and take policy makes you more admirable and dependable. Your openness...
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Leadership

Leadership
Leadership Profile of a successful leader Adaptive Capabilities:  Leaders need to radically change their mindset so as to stand the test of time; but the core leadership attributes like vision or creativity, intelligence, commitment, and a healthy dose of luck still continue to define the pre-requisites of success. Integrity of  Character is most important when talking about successful leadership. The philosophical undercurrent is that “Be Good, Do Good” and you will be good. The motive must be devoid of mistakes though there is room for mistakes in judgment. Leaders must have a clear vision and be able to communicate this vision to others so that it becomes a shared vision and everybody willingly contributes in fulfilling the vision.  Six ‘C’s or six criteria that determine a leader’s credibility  Conviction Character Care Courage Composure Competence Cross-Functional Expertise – Acquisition of knowledge should make a leader humble and flexible and gaining knowledge must be seen as a life long experience rather than collection of voluminous data or skills. A leader will try to apply his broad functional knowledge and expertise in the right places and the results will be definitely magnificent. A leader must look into the possible options rather than to plan, the possible rather than the perfect, involvement instead of obedience. Change is the only entity that remains unchanged and it is inevitable for the leaders to consider change as the core element of growth. With accelerated pace of change in the economic, political and socio-cultural environment, leaders not only need to acquire new knowledge and skills but they also need to unlearn many of the things that have out-grown their purposes. Leaders should follow the CODE OF PRIDE to motivate the workforce. P– PROVIDE FOR A POSITIVE WORKING ENVIRONMENT R– RECOGNISE EVERYONE’S EFFORTS I– INVOLVE EVERYONE D– DEVELOP SKILLS AND POTENTIAL E– EVALUATE AND MEASURE CONTINUOUSLY In large corporate organizations, the leader must be willing to share power and control so that leadership is encouraged at various levels. Successful leaders are those who are self-motivated by setting their own standards and compete with themselves. Innovation is the need of the hour What do you mean by innovation? Creating something new or modifying the old one. Here the term innovation implies the change in the “THOUGHT PROCESS” of leaders who are able to turn a crisis into an opportunity. Also called as “THINKING OUT OF THE BOX” where a leader finds new application for old ideas which cannot be discarded or dis-regarded. “You must learn from your past mistakes but not Lea(r)n on your past successes”. High achievers take moderate risks calculating the circumstances and they rely on their own abilities unlike low achievers who invariably like to minimize risks or take wild and irrational risks. Running a corporate business has become more like an experiment since we cannot control or predict the future. It is highly unstable and unpredictable. So leaders have to cope up with this non-linear force acting in the external environment building up pressure. Leaving things as they are can be just as predictable as changing everything, you lose or win both ways. Now let us look at some of the definitions of Leadership 1. “Leadership is generally defined as influencing people so that they will strive willingly towards the achievement of group goals.”- Koontz and O’Donnell 2.  “Leadership is the lifting of man’s visions to higher heights, the raising of man’s performance to higher standards, the building of man’s personality beyond its normal limitations.”- Peter F.Drucker 3. “Leadership is the ability to secure desirable actions from a group of followers voluntarily without the use of correction.”- Alford and Beatty 4. “Leadership refers to the quality of the behavior of individuals where by they guide people on their activities in organized efforts.”- Chester I.Bernard  Behavioral Commitments of a Leader: Challenging the process Challenging the status quo and act as radical change agents Inspiring others by being pioneers, instigators, navigators and learners Showing risk-taking...
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