Management Accounting and business models are deeply interconnected with each influencing and
shaping the other. Understanding this relationship is crucial for organization aiming to enhance
efficiency, drive profitability and sustain competitive advantage.
Understanding Management: It involves the preparation, analysis and presentation of
financial and non-financial data to help managers make informed business decisions. Whereas
financial accounting which focuses on providing information to external stakeholders, management
accounting in primarily concerned with internal decision-making processes. Key functions of
management accounting includes budgeting, forecasting, variance analysis, and cost management
and performance evaluation.
Understanding Business Models: A business model refers to a company’s plan for making a profit. It
identifies the products or services the business plans to sell, its identified target market, and any
anticipated expenses. Business models are important for both new and established businesses. They
help companies attract investment, recruit talent, and motivate management and staff.
The Interconnections:
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