Management Accounting

Definition

Controlling is a management function that forms part of corporate management. It is responsible for planning and managing all departments within a company. In addition, controlling primarily serves a monitoring function. It assesses whether corporate goals can be achieved with the available resources, monitors the competitive landscape, and supports senior management in setting goals. By monitoring corporate figures and making them transparent, controlling provides a basis for decision-making and can assist management with recommendations for action. The goal of controlling is to coordinate all business processes in such a way that the budget can be planned in accordance with business objectives and the company’s long-term viability can be secured.

A distinction must be made between operational and strategic controlling. Operational controlling analyzes quantified data, for example through budgeting, break-even analysis, or investment analysis. In contrast, strategic controlling deals with long-term planning and monitors a company’s potential for success. Together, operational and strategic controlling form the information basis for the so-called controlling cycle, which consists of planning, information, control, analysis, and management.

Responsibilities in Controlling

The main responsibilities of the Controlling department include monitoring company financial figures, preparing planning documents, reviewing planning steps, monitoring target values and comparing them with actual results, as well as coordination tasks such as cross-departmental data collection and preparing figures for management (reporting).

What is the difference between management accounting and bookkeeping?

Management accounting expands upon financial andoperational accounting by consolidating their data and supplementing it with management accounting metrics. While accounting systematically records a company’s past business activities, management accounting takes a different approach. Instead of working solely with actual figures, management accounting also uses projected data and actively plans a company’s business strategy.