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Administrative Accounting

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Administrative accounting is known as the type of accounting that focuses on the informational needs of the various administrative levels. This accounting seeks to generate internal reports so that the administration of the entity can develop efficiently.

In addition to all of the above, it's necessary to establish another series of identity signs of administrative accounting:

- Gives both internal and external information of the company.
- It's carried out fundamentally so that the owners or managers of the company in question can make decisions in the most effective and effective way possible. Hence, it's required that the reports prepared in this regard be quick, concise and detailed.
- It's very focused on details related to the different departments that shape an entity, to inventories, to the equipment that's owned, to the activities of the different areas…
- It's based on a wide variety of information as well as, by Of course, in the accounting data.

The company accountant is responsible for designing, making and presenting the administrative accounting reports. These reports don't usually transcend the doors of the company: that is, they are only used by the managers, owners or managers of the company to evaluate the development of the business according to the policies and objectives established previously.

Administrative accounting, therefore, makes it possible to compare the company's results in the past with those obtained in the present. Various control tools are used for this. The results of administrative accounting also allow planning and anticipating the future of the firm.

Unlike financial accounting, administrative accounting isn't regulated by regulations or standards since its results are for internal use and are used for decision making within an entity.


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