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Management Accounting for QuickBooks

QuickBooks has been designed to provide the bookkeeping function of a business and is an excellent product as demonstrated by its market share and the over 4 million users claimed. However, it was primarily designed to provide financial accounting functionality. More recently, it has been enhanced to provide more reporting for management, however, as many users have found, trying to provide both financial accounting and management accounting is a very difficult task.

Comparing financial accounting to managerial accounting is similar to comparing a grand prix race car to a dragster. Both are motor vehicles, both are designed to race, both are design to go as fast as possible and both are operated by a single driver. However, running a grand prix car at the ¼ mile drag track will not produce a win; nor will a dragster do well in a grand prix race. And it is difficult to see how a race car built to do both would be competitive in either venue. Each needs specific characteristics that are specific to its purpose.

In a similar way, Data Explorer Suite: For use with QuickBooks was designed to satisfy the needs of management accounting.  It provides the appropriate technology and design to accomplish managerial reporting and analysis for management accounting.

Management accounting or managerial accounting has a very different goal than the typical financial accounting function as summarized in a 2009 Managerial Accounting text book:

      Financial Accounting       Management Accounting
  • For external reporting
  • For internal planning and control
  • Provides financial statements for external stakeholders
  • Provides information to help managers as the lead the business •
    • Plant & equipment
    • Human resources
    • Sales
  • Satisfies management’s accountability to
    • Owners and Creditors
    • Regulatory agencies
    • Customers and society
  • Forward -looking

The book further describes these differences:

  Management Accounting Financial Accounting
Primary users Internal – the company’s managers External – investors and creditors
Purposes of information Help managers plan and control operations Help with investment and credit decisions
Focus and time dimension Relevance of information; focus on the future Relevance and reliability of information; focus on the past
Type of report Internal reports; no audit needed Financial statements prescribed by GAAP; audit by CPAs
Scope of information Detailed reports on weekly or daily basis Summarized reports quarterly and/or annually

Data Explorer Suite: For use with QuickBooks  employs business intelligence technology specifically to provide Managerial Reporting and Analysis to augment the financial accounting needs and to provide management accounting functionality that is not provided by QuickBooks. Data Explorer Suite is designed to complement QuickBooks, not to replace it.