As an accountant, you’ll need a solid grasp of:

• who is using the information that you provide, and
• what they are using the information for.

Many different people will depend on the information that you provide to them in order to make important decisions!

Accounting information is designed to meet the needs of both internal users and external users.

Internal users of information will use what is generally termed “Management Accounting“.  External users will generally use “Financial Accounting” information.

Internal and External Users

In this section we take a look at some examples of internal and external users of accounting information.

Internal Users

• Marketing
  These users need to know what prices to charge for goods and services to maximise company profits and to project income from new sales campaigns.
• Human Resources
  These users use accounting information to make decisions about training, recruitment, staffing, incentives and performance evaluation in terms of cost and dollar benefit to the organisation.
• Management
  These users need to compare product profits, make operations decisions and determine asset capacity.
• Employees
  These users want to know about possible pay rises, bonuses, job security and promotion opportunities.
• Finance Directors
  These users want to know if there is sufficient company cash flow to pay dividends and to forecast cash needs.

External Users

• Community
  These users are concerned with the company’s contribution to economic growth in the community.
• Government Authorities
  These users need to determine the amount of tax the company should pay.
• Banks
  These users need to know the company can repay its loans.
• Investors
  These users want to know about company profits and to compare the company to other companies.
• Consumers
  These users want to know about the company’s sustainability and consistent quality of goods and services.
• Special interest groups
  These users are interested in the environmental, social, and industrial issues of the company’s operations.

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