Management accounting is a broad field covering a wide range of industries and roles within those industries. Those with management accounting backgrounds are well suited to work as everything from risk analysis professionals to efficiency experts.
The education necessary for this degree reflects the position itself, as it combines traditional accounting education methods with management education. Extrapolating data, preparing reports and making recommendations are the skills that set management accounting apart from both accounting and management.
TL;DR (Too Long; Didn't Read)
A management accountant can help formulate a strategy by working with internal review boards to help clients budget more effectively and efficiently.
Management Accountants Formulate Strategies
You might ask yourself, "Where does the management accounting function fit into an organization’s structure?" Management accountants typically work with internal review boards either as contractors or in an in-house capacity.
The goal of all management accountants is to help their client or company budget and perform more effectively and efficiently. For small companies, this may mean that their management accountant handles a few aspects of the business. In large companies, they may be part of a team focused on a single area of business.
Jobs for a Management Accountant
There are a number of jobs for which a management accountant would be well suited. For instance, those with this background often succeed in risk management. After all, growth is inherently an act of risk since there is no promise that new undertakings will prove fruitful.
A management accountant can tell a business if it makes sense to expand by looking at the performance of other locations, the performance of competitors in the market and the general economic health of an area. If the company has two locations and the second one took six months to be profitable, for instance, you could expect the same for a similar area.
If you have competitors in the area that are doing poorly, it may not be advisable to add a branch in that area. By contrast, if there are no competitors currently in that region, you might want to move more quickly.
Advising on Investments
If a company is turning a profit, parts of that profit can either be invested into the business or into other investment vehicles. Management accountants understand how markets and investments work, and that gives them the ability to advise your company on what the best use of your profits would be. They should also be up to date on market research.
For example, if you have had record profits for the past fiscal year and can invest some of them, your management accountant will know if your competitors have made any business changes that would give them an edge. They would also know if there are better, more economic options in which you could invest. If you are not going to invest in your company, then they can advise you on what other investment vehicles are options for you.
Because they should have a good handle on market awareness, your management accountant should be able to drive long-term and short-term investment vehicles without much oversight. With diversified streams, you will ideally have more money to reinvest in your company or the market.
Expense and Budget Planning
Budgets can feel extremely daunting. This is particularly true if you are new to business ownership. You don’t want to pay your employees unfairly, but you also know that you need to bring home a paycheck yourself. You also need to keep investing in your own business.
A management accountant is a critical team member who can look at not just your hard numbers but also your processes to assess if you are as efficient as possible. By checking processes against their costs, a good management accountant may be able to save you a significant amount of money.