Ever considered becoming a management accountant? Here’s what to expect.
Management accountants are trusted to guide critical business decisions and drive strong business performance. They understand how the different parts of the business need to work together, combining financial and business expertise to achieve sustainable business success. While many chartered global management accountants work in the finance department, others put their broader business training to use across the organisation, in roles including Board Director, Chairman or CEO.
A key focus of management accounting is planning for the future. Management accountants develop more detailed reports than financial accountants. These can include information about specific products, market reach and regional information. Based on the information obtained from reports such as surveys, budgets or competitor analysis, managers can set objectives and outline how they will be achieved.
Rob Johnson, Strategic Planning Manager at EE explains that EE have a five year plan and part of his role is to own and drive forward key elements ensuring they’re aligned to company strategy. “The work that underpins the plan needs to be completed with granularity and rigour to ensure optimised decision making, and part of my role is to ensure this transpires.”
2. Decision making
The quality of a business’s decision making is often how it will out-perform competitors. Management accountants are able to analyze data in the context of the business, understanding what data is relevant and meaningful to make key decisions.
Management accountants provide information to decision makers which understand the business, the market and factors in prior knowledge and experience of the business’s needs and challenges. Due to the training management accountants receive they are able to provide a unique service which technology cannot match.
Joanne Beattie Assistant, Financial Controller at Nestle describes the purpose of her current role is to, “provide a comprehensive support service to the factory, to generate data which allows the factory management team to make informed decisions.”
3. Problem solving
Contrary to financial accounting, which focuses on historical reports, management accounting considers actual performance and compares it to goals and the future outlook. This information is used to identify issues that may arise in budgets or production changes and develop alternative strategies. Sometimes, the accounting information that a company has may not be sufficient in solving a problem, so management accounting gives managers the option of requesting additional information with limited time constraints.
John Anderson, Finance lead at the Department of Transport, explains that, “the problem-solving techniques which I picked up on the CIMA course have been invaluable to me in approaching and tackling issues which often involve high levels of ambiguity, complexity, and uncertainty.”
Management accountants must assess risk and implement strategy through planning, budgeting, and forecasting. In order to report on financial and non-financial measures of performance they must understand the financial and operational sides of the business.
Management accountants often take an active role in the day-to-day and strategic decisions that face an organisation. There is a growing emphasis on providing non-financial performance measures. Because of this they are also considered strategic business partners in the management of an organisation’s activities.
Hayley Hunton, Senior Finance Manager, at Bentley Motors Ltd explains that as a management accountant she is constantly forward looking and has to consider the impact of strategic decisions on the wider business. “My current role is to manage a team within engineering finance who control project spend for the various functions within engineering. This includes the production of the monthly R&D report against budgets, forecasts and strategic plans.”
The evolving role of the management accountant
The role of the management accountant is changing to provide better support for decision making and performance management. The production of standard reports (such as end-of-month financials, variance analysis, KPIs and regulatory filings) is becoming more automated. Demand is growing for management accountants because they can provide ongoing insights, from both financial and non-financial data to help which helps organisations succeed and grow in an increasingly competitive climate.
Tamarah Alrayes is Specialist, Recruitment Marketing — Management Accounting for CIMA.