A Management Accountant is a key role within a business, but what is the role and what are they expected to do in it? ICAEW delves deeper in this management accountant guide.
What is a management accountant?
A Management accountant is an important role in any organisation. Working in the accountancy or finance department, management accountants are responsible for the preparation of management accounts and several other reports whilst also overseeing general accounting procedures and practices within the business. A management accountant's role combines financial, analytical and management skills to aid senior management with decision making and promoting long term financial success for a business.
What does a management accountant do?
A Management accountant works within a business to prepare and present financial reports to senior management teams in order to give an insight into business performance. The reports are used to aid with business strategy and also in decision making within the business, to ensure growth and profitability.
Key management accountant responsibilities
The primary responsibilities of a management accountant vary, but mostly include:
- Preparing monthly management accounts and other financial reports such as budgets.
- Presenting reports to senior management to aid with business decision making.
- Compiling strategies that will reduce business costs.
- Obtaining finance for projects.
- Advising on the financial implications of business decisions.
- Developing and overseeing financial systems and procedures and identifying opportunities to improve these.
- Controlling income and expenditure within the business and ensuring that expenditure is inline with budgets.
- Overseeing accounting technicians and support with generic accountancy tasks.
- Communicating with all levels within the organisation and being able to present financial information to non - finance members of staff.
- Analysing and managing risk within the business.
Importance of a management accountant
Management accountants play a highly important role within an organisation. Key financial data and reports produced by management accountants are used by senior management to make informed business decisions. The analysis of business performance is a vital role in a management accountant's job, this analysis is produced by looking at current financial information and also non - financial data to determine the position of the business. This information is then used by senior management to make short term decisions and also to develop strategies for the long term growth and development of the business that ensure stability and profitability.
Skills required for the job
Management accountants are expected to have excellent analytical and numerical skills whilst maintaining a strong attention to detail. A solid foundation of basic accountancy skills is also required for this role including an understanding of the generally accepted accounting principles. An understanding of business is also important for management accountants along with the ability to communicate effectively at all levels to advise and liaise with senior members of staff. The duties of a management accountant should be carried out with a high degree of organisational and strategic thinking skills.
Career opportunities for a management accountant
Any business organisation with a financial department will require a management accountant, they are also frequently employed by financial institutions. With experience, a management accountant can expect solid career progression. Professionals with the required qualifications and experience can go on to become financial controllers, finance directors or chief financial officers.
Competencies of a management accountant
There are high-level competencies required for the management accountant role:
Data, digital and technology
- Identifies strategic options to add value, using data and technology.
- Analyses and evaluates data using appropriate tools and technologies.
- Applies technologies to visualise data effectively and clearly.
- Applies ethical judgement and scepticism to the use of data and data technology.
- Monitors developments in global trade, markets, business practices and the current economic climate and suggests the improvements needed in the financial and risk management of a business.
- Advises on current business asset valuations, capital projects and investments through the right analytical qualitative and quantitative techniques.
- Can see, evaluate and advise on alternate sources of business finance and different ways of raising finance.
- Communicates and advises what impact financial decision making is having on developments in regulation, ethics and governance.
- Assesses and advises on the right strategies to manage business and organisational performance in relation to business and finance risk while communicating the impact effectively.
Governance, risk and control
- Evaluates all internal structures and governance to protect the interests of stakeholders in the long term.
- Recommends the right strategies to ensure the organisation adheres to governance structures and applies best practice internal controls.
- Highlights and manages risk appropriately.
- Makes use of risk management strategies with the best interests of the company and its stakeholders in mind.
- Monitors and applies legislation, policies, and procedures relevant to the organisation.
- Uses development and performance management across the wider business and technological environment, as part of the strategic planning and implementation.
- Directs performance in the company through selecting and measuring financial and non-financial performance indicators.
- Collaborates on all tactical and organisational areas involved with budgeting, control, capital investments, resource management and people.
- Consults on design and use of the latest technology and information systems to evolve decision making and organisational performance.
Stakeholder relationship management
- Develops positive relationships with internal and external stakeholders.
- Communicates and gains commitment from internal and external stakeholders.
- Uses emerging technologies to collaborate and communicate effectively with stakeholders.
- Applies professional and ethical judgement when engaging with stakeholders.
- Aligns organisational strategic objectives with stakeholder needs and manages expectations.
Strategy and innovation
- Use business and commercial acumen awareness to deliver business objectives.
- Can suggest appropriate strategic options where sustainable plans and objectives can be developed.
- Evaluates, justifies, and puts strategic options in place.
- Uses various innovative methods to implement strategy and manage change.
What is the difference between a management accountant and a financial accountant?
The difference between both financial accounting and managerial accounting concerns the intended users of information. Managerial accountants require business acumen and their aim is to act as business partners, helping business leaders to make better-informed decisions, while financial accountants aim to produce financial documents to supply to external parties.
Why be a management accountant?
Management accounting offers a highly respected career path with doors into every sector and industry. It’s what essentially keeps our economy going by providing the vital support business leaders need.
It’s also a path that doesn’t discriminate and is accessible to all, with or without a degree. So if you know where you’re heading after leaving school or college, it's possible for you to jump straight into the world of accounting by completing one of our entry level qualifications to help build your knowledge of business, finance and IT.
With clear steps to progression, you’ll also steadily be on your way to earning a high-flying salary. Our ACA courses offer a defined path to becoming a certified management accountant regardless of the route you decide to take, whether it be university, an apprenticeship or if you already hold qualifications such as an AAT, with our AAT-ACA Fast Track route.
What skills does a management accountant need?
Management accountants are expected to have excellent analytical and numerical skills whilst maintaining a strong attention to detail. A solid foundation of basic accounting skills is also required for this role, including an understanding of the generally accepted accounting principles. An understanding of business is also important for management accountants, along with the ability to communicate effectively at all levels to advise and liaise with senior members of staff. The duties of a management accountant should be carried out with a high degree of organisational and strategic thinking skills.
How much does a certified management accountant make?
The average salary for a chartered management accountant in the UK is £51,229, an increase from a £40,000 average earned by management accountants without a chartership. These are figures that have been reached through surveying individuals at all career levels from entry level to senior level positions.
If you’re looking for a new role, ICAEW Jobs have the latest management accountant jobs which you can apply for online. New roles are posted every day from businesses across the UK from a wide range of industries. Get started with your applications today by uploading your CV and get job alerts when new roles appear.
Related: How to become a chartered accountant