Financial Accounting is what your book keeper and accountant do. It is to compute your tax liability. It is first and foremost for others. It is based upon standards (GAAP) and it is important to get the math right down to the dollar. It is based on what happened in the past and is calculated after what has happened has happened. Items like net income and book value are financial accounting concepts.
Managerial Accounting is what you (or your book keeper) do for you to assist in managing your business. There are no industry or national standards, you set your own. Often managerial accounting is most important when calculated in round numbers. Cost per new patient, overhead per hearing aid sold, sales and expense projections are managerial accounting concepts.
CPA's live in a world of financial accounting. This is a good thing as our government requires us to keep these records and report them in a standard way.
I know this will cause many of you to think.
Rick
