Management Accountant – A Key Person in the Success of Business

Every business has a cost involved in its operation. It is the aim of business heads to minimize or optimize cost of operation and look for ways to increase profit. Companies, irrespective of whether they are small, medium or big, will have multiple departments with different costs of operations. Maintaining the cash inflow outflow data and estimating the cost of operation for all departments throughout the company can be a challenging task. This is where management accountants come into picture. Management accountant is a person who prepares reports of the cost of operation, helps in budgeting and taxation and provides a clear picture of crucial assets such as human capital and financial capital within the business. Since managerial accountants deal with financial data related to the entire organization, the information provided by them through reports is crucial for strategy planning, investment planning and decision making in business. With globalization, the role of a management accountant has become increasingly challenging. Today, the opportunities for managerial accounting role are plenty and any person with a bachelor’s degree in finance or accounting who is interested in math and has good managerial and communication skills can aspire to start a career in the field.

Managerial Accountant – Key Duties 

Budgeting

A management accountant has records of income and expenses of each department of a business. The executive also has the details of tax liabilities of the company. All this information will help management accountants in preparing a budget for the company for an upcoming period. This is one of the most important things the accounting professional does which enables proper allocation of funds and investment in new proposals.

Strategic Business Planning

Managerial accountants support the management in setting strategies for business. With historic financial records on one side of the table and the proposed plan for changes in business on the other side, managerial accountants calculate and bring out crucial figures through reports and estimate the cost of going with the new business plan. The accounting professionals consider a number of factors that can affect the new plan and give the management valuable information that can help them make decisions. Risk management also comes as part of this business planning process and accounting professionals get involved in it. Since they are aware of the financial policies of the government, business environment and competition, law and various other factors, the information provided by them adds high value to the decision related to proposed business plan.

Developing a Financial System

Management accountants ultimately bring in place a financial system within the company to continuously measure the efficiency of the operations of each department. The accounting process is not a one-time process since business and the company is subject to continuous change and so is the external environment. The role of the accounting professional will be to establish a system of accounting and make sure that the funds are allocated appropriately within the company to reduce cost of operation, increase performance efficiency and look for ways to maximize profit leading to the success of the organization.

There are dedicated institutes spread throughout the world which promote, regulate and develop cost and management accounting profession in respective nations. The Institute of Management Accountants in US provides certification (CMA or Certified Management Accountant) in the field of managerial accounting. Candidates throughout the world attend exams and go through the selection process to get this certification.

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