Management Accounting – What does a Management Accountant do?
Keywords – Management Accounting – Management Accountant – What does a Management Accountant do
Management accountants usually come from a CIMA background where they are employed by a company to analyse organisational data and source opportunities in the market. This allows the management accountant to be focused on the business to grow.
However, management accountants are still able to prepare accounts and submit to HMRC for individual businesses. On the other hand, usually, ACCA qualified accountants work in accounting practices who carry out the financial work for their client.
Management accountants are usually employed by larger companies because of the expected salaries. This is because a management accountant is expected to cover both the managerial and accounting sides of a business.
If a startup has a management accountant on board, then it is in a highly powerful strategic position. Essentially, in such cases, management accountants facilitate appropriate decision making, based on the right presentation of information.
Usually, management accountants need to have greater leadership skills as compared to accountants. When working together, accountants are expected to provide the raw data for management accountants to prepare appropriate reports and make sense of ground realities.
Put simply, a management accountant works a level higher from a normal accountant. But, there are some specific differences too.
Differences Between an Accountant and a Management Accountant
At an accreditation level, the difference between ACCA and CIMA specialism can be understood by a simple statement. ACCA focuses on numbers of the past whereas CIMA explores the numbers of the future.
So, the core skills required for management accounting involve:
- Cost Analysis – Where the current costs are eating into the business, where should efforts be made to make savings.
- Buy or Produce – Is it worth manufacturing in house or simply outsource for lower costs. Simply, what is the best decision for the business?
- Budgets and Cost Allocation – The business needs to find a balance. So, what should the business be investing into and how much?
- Change – Support decisions with stronger confidence. For example, when and how should employees be rewarded for success? And, what overall impact that will have on the business?
- Planning – A good management accountant worth their salt will have a great awareness of the business economy. For example, they will understand the value of going from digital to physical.
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