Financial and Managerial Accounting in Healthcare Medicine Essay

Financial and Managerial Accounting in Healthcare
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Financial and Managerial Accounting in Healthcare
In the healthcare industry, managerial and financial accounting are essential in ensuring that institutions offer affordable and essential quality medical services (Nowicki, 2018 & Hashmi, Amirah, Yusof, 2020). Both financial and cost accountings revolve around economic and business events that occur within the medical facility. Both classes of accounting quantify the outcomes of healthcare services and any other transactions within the institution (Nowicki, 2018). Besides, both financial and managerial accounting deals with organizational records, incomes, expenses, institutional assets, possible risks, and cash flow. The two types of accounting in a medical setting use a similar accounting information system and report analysis approach (Graybeal, Franklin & Cooper, 2018). Both managerial and financial accounting use similar information from the requirements of financial accounting. However, the accounting systems have to work for the two methods, which offers insight that is essential in making overall organizational decisions. Both financial and managerial accounting is critical in measuring and determining costs over a certain period.
Despite the various similarities, there are significant variations between financial and managerial accounting in healthcare (Graybeal, Franklin & Cooper, 2018). The differences revolve around compliance regulations, accounting specifications, and target groups. Managerial accounting is essential in producing information that aids managers in strategic planning, goal setting, and efficient use of organizational resources (Islamiyah, 2017). Financial accounting, on the other hand, offers information to creditors, investors, and healthcare regulators. Financial statements of a medical institution resulting from financial accounting give information on the company’s general performance. Cost accounting uses a healthcare facility’s past performance to come up with business projections; thus, it is essential in making organizational decisions (Islamiyah, 2017). On the other hand, financial accounting uses data statements for a certain period, which helps investors, creditors, and healthcare regulators create personal forecasts.
Legally, reports from cost accounting are only useful within the healthcare organization. The internal use of information from managerial accounting ...