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HR and management accounting plays a vital roles in an organization. Management accounting tracks costs, revenue, reports on financial results and more importantly allocate financial resources to support the entity’s objectives. HR on the other hand manages people and recruiting talents. Further, while their primary responsibilities are different, finding the balance between these operations do create values as the business grow. According to my VP of Finance, “HR tends to spend, while accounting would try to keep the dollars”. My HR manager on the other hand is of the views that “building a strong collaboration between these two areas can somewhat reduce administrative burden and deliver better strategic advantage and outcome”. I feel that management accounting will not directly fits into the HR role but will interest each other to achieve/gain and provide better efficiencies.
Below are some examples how these two areas intersects to deliver that organization effectiveness.
Retaining employees: High job turnover, due to bad hire can cost precious time, energy and money, so it’s important for accounting and HR work together to evaluate the cost of recruiting and replacing employees versus retaining them. Moreover, from a compensation reviews and other employee’s benefits perspective, these two departments can help identify and retain top performers and build stronger teams and better morale throughout the organization.
Budgeting: Accounting always consult with HR when making budgeting/financial decisions, such as making sure that headcounts are accurate. On the other hand, HR usually takes financial input from accounting to get thoughts on how issues such as how unused sick days converted to pay days will affect profit/ bottom line.
Employees insurance: HR understand the plans that best meet the needs of the employees while accounting will keep the premium cost in check.
Management accounting and financial accounting do have a few things in common, both as being relevant in equal measure.
a. both methods of accounting are used simultaneously in many organization to create a more efficient and profitable business (tracking of cost accurately and managing financial information efficiently).
b. Managerial accounting is more of a problem solver, while financial accounting shows what the business has accomplished to date (financial presentations).
c. to efficiently track business expenses, organizations uses managerial accounting, but if you’re using accounting ratios to determine the profitability, then you’re using financial accounting.
Type Of Service: Academic Paper Writing
Type Of assignment: Coursework
Number of sources: 1
Academic Level: Junior(College 3rd year)
Paper Format: APA
Line Spacing: Double
Language style: CA writer