The difference between financial and management accounting lies in the fact that they are two different aspects of an enterprise, one is specific in sense and other encompasses larger areas. Financial accounting is performed on principles and standards to present an accurate report of the substantial productiveness of the business and submit the genuine profit margin to the governmental tax collectors. Management accounting also works in set patterns and standards basically for taking decisions on alternatives of the corporate.

Management accounting identifies, measures, accumulates, analyses, prepares, interprets, and communicates the different information for planning, evaluating and controlling and assures relevant use of the resources. Management accounting also takes into consideration the financial reports of creditors, shareholders, tax authorities and regulatory agencies.

Thus, the financial accounting has a small diameter and the management accounting has a wider diameter. The management accounting also has its hand on customer relationship management. The reports produced by the management accounting is used by both the managers and the employees. It helps to record, control and plan the different activities of the association.

Whereas, financial accounting provides information to be used by both the organization and the parties who are outsiders to the organization, they can be shareholders, creditors, bank or other bodies. Financial accounting has a record of the overall performance of the organization it achieves over the definite period of time. As per law, the financial accounting is related to money or other kinds of revenue. The financial accounts are basically of monetary nature. The accounting done will carry all reporting on the expenditure, profit, sales, purchasing, project expenses and alike.