Management Accounting

An Overview of Management Accounting

Compiled and Written by Accounting.com Staff

The field of Management Accounting, often referred to as Managerial Accounting or Corporate Accounting, includes the financial and accounting tasks required to operate a business. Managerial accountants work within companies and organizations to direct internal financial processes; monitor costs, sales, spending and budgets; conduct audits; identify past trends and predict future needs; and assist company leaders with financial decisions.

Management accountants are often confused with financial accountants; while both provide valuable services to an organization, there are key differences between the two roles. Managerial accounting primarily involves completing tasks and producing reports that inform company leadership about financial decisions related to general company operations. Financial accounting's central focus is informing external groups – such as banks, boards of directors, stockholders and tax agencies – about the company's financial status.

Someone entering the managerial accounting field should be skilled in risk management, budget planning, strategic planning and financial data analysis. These accountants also have a detailed knowledge of generally accepted accounting principles (GAAP), strong communication skills and a forward thinking approach to their work.

Careers in Management Accounting

Management accountants find employment opportunities in a variety of work settings and industries. Professionals in this field are in demand in public and private companies, nonprofit organizations and government offices. Each company designates specific job titles and responsibilities based on their business model and needs.

The primary duties of a management accountant vary according to an organization's size, compliance and reporting requirements, and total revenue. Review the following career profiles for expectations of management accounting positions representing entry-, mid- and senior-level employment.

Specializations

Budget Analyst

Budget analyst positions are found at a wide range of companies and organizations, as well as at all levels of government. They often report to accounting or finance managers. Job titles with similar responsibilities include cost estimators, budget accountants and management analysts.

  • Responsibilities
  • Job Stats
  • Education and Experience Requirements
  • Additional Qualifications Recommended

Responsibilities

  • Organize financial tasks
  • Develop budgets
  • Monitor cost and revenue trends
  • Inform project managers of budget details
  • Make strategic planning and resource allocation recommendations

Job Stats

  • Employment Numbers: As of 2012, the Bureau of Labor Statistics reported 61,700 budget analyst positions nationwide.
  • Salary: The Robert Half 2015 Salary Guide indicates that budget analysts working in mid-size companies, who also have one to three years of experience, can expect an annual salary of $53,000 to $71,750. Salary amounts may be higher at larger companies and for analysts with more experience.
  • Projected Growth: The number of budget analyst positions available is expected to increase 6% between 2012 and 2022, which is slower than average growth across all occupations as predicted by the Bureau of Labor Statistics.

Education and Experience Requirements

  • A bachelor's or master's degree in accounting, statistics, finance, business or a related field is expected.
  • Five or fewer years of relevant experience is typical for entry-level budget analyst positions.

Additional Qualifications Recommended

  • CPA: The Certified Public Accountant license is granted through State Boards of Accountancy. The process includes examination, as well as documentation of required education and prior experience as determined by each state.
  • CGFM: The Certified Government Financial Manager credential may be preferred or required for positions in government agencies. The requirements include a bachelor's degree, three examinations, at least two years of related experience and continuing education.

Financial Analyst

Financial analysts work in a wide range of industries from international businesses and insurance companies to credit institutions and nonprofit organizations. They often report to a senior accountant or financial manager. risk analysts, staff accountants and portfolio managers have similar roles and responsibilities.

  • Responsibilities
  • Job Stats
  • Education and Experience Requirements
  • Additional Qualifications Recommended

Responsibilities

  • Make cost management decisions
  • Invest funds
  • Improve financial practices
  • Provide detailed data analysis and reports that track budget trends and forecast future needs.

Job Stats

  • Employment numbers: The Bureau of Labor Statistics reports a total of 253,000 financial analyst positions in 2012.
  • Salary: According to the Robert Half 2015 Salary Guide, financial analysts at mid-size companies, who have one to three years of experience, can expect to earn $55,250 to $72,500 annually. Salaries are typically higher at larger companies and for those with more experience.
  • Projected growth: The job outlook for financial analyst jobs is positive. The Bureau of Labor Statistics indicates that 16% growth is expected between 2012 and 2022, driven in part by the need for expertise in investment analysis and regulatory reform.

Education and Experience Requirements

  • A bachelor's or master's degree in accounting, finance, economics, statistics or a related field is expected.
  • Three or more years of relevant experience is typical of accountants entering a financial analyst position.

Additional Qualifications Recommended

  • CMA: The Certified Management Accountant credential, offered through the Institute of Management Accountants, includes work experience, an exam and continuing education.
  • CFA: The Chartered Financial Analyst credential is another option for accountants who will be working primarily on tasks related to investment analysis and portfolio management.

Accounting Manager

Accounting managers work in a range of settings, from retail and healthcare to education and nonprofits. This role usually reports to a senior-level position, such as a finance director or a corporate controller. Job titles with responsibilities similar to those of an accounting manager include: accounting supervisor, accounting manager and senior accountant.

  • Responsibilities
  • Job Stats
  • Education and Experience Requirements
  • Additional Qualifications Recommended

Responsibilities

  • Prepare financial statements and balance sheets
  • Assist with auditing requirements
  • Ensure compliance with financial regulations
  • Oversee the organization's accounting processes
  • Supervise and train staff accountants

Job Stats

  • Employment numbers: The Bureau of Labor Statistics' ongoing data collection found that there were 1,275,400 accountants and auditors employed in 2012.
  • Salary: Accountants working in management positions at mid-size companies can expect to earn an annual salary of $74,500 to $97,500, according to the Robert Half 2015 Salary Guide for Accounting and Finance. Salaries are generally lower at smaller companies and higher at larger companies.
  • Projected growth: Accountants and auditors in general can expect average growth of 13% between 2012 and 2022. The Bureau of Labor Statistics attributes this increase in part to the impact of financial regulations and need for accounting expertise in global business operations.

Education and Experience Requirements

  • A bachelor's or master's degree in accounting, business, finance or a related field is expected.
  • Five to seven years of related experience is typical for accountants seeking management positions.

Additional Qualifications Recommended

  • CPA: The Certified Public Accountant license, granted through State Boards of Accountancy, may be preferred or required for some management-level positions. The process includes required education and prior experience as determined by each state, and an exam.
  • CMA: The Certified Management Accountant credential is earned through a combination of work experience, an exam and continuing education. This certification is offered by the Institute of Management Accountants.

Controller

Controller positions are found in business settings, nonprofit organizations and government agencies. The range of responsibilities varies based on the size of the company and its accounting office. The duties and expectations are similar to those found in other positions, such as finance manager, director of accounting, corporate controller and comptroller.

  • Responsibilities
  • Job Stats
  • Education and Experience Requirements
  • Additional Qualifications Recommended

Responsibilities

  • Oversee all accounting functions
  • Maintain financial data
  • Supervise accounts payable and receivable transactions
  • Audit financial documents and processes
  • File tax returns
  • Establish internal accounting policies and procedures
  • Create financial reports

Job Stats

  • Employment numbers: There were 532,100 financial managers in 2012, according to the Bureau of Labor Statistics.
  • Salary: The Robert Half 2015 Salary Guide for Accounting and Finance reports an annual salary range of $79,250 to $209,000 for controllers. Smaller companies with lower overall revenue or sales generally offer lower salaries for this position.
  • Projected growth: The Bureau of Labor Statistics indicates that this position will see average growth of 9% between 2012 and 2022, but this can vary depending on the industry of employment.

Education and Experience Requirements

  • A bachelor's or master's degree in accounting, finance, business administration or a related field is expected.
  • Five to 10 years of related experience is typical for management accountants seeking positions at this level.

Additional Qualifications Recommended

  • CPA: Earning a Certified Public Accountant license includes an exam and the documentation of education and prior experience. This may be required if the company is publicly traded and reporting to the Securities and Exchange Commission.
  • CMA: The Certified Management Accountant credential is earned through a combination of work experience, an exam and continuing education. This certification is offered by the Institute of Management Accountants.

Chief Financial Officer (CFO)

CFOs are top-level executives found in small and large companies, with varying responsibilities based on the size of the staff and budget, as well as the nature of the organization's programs, products and services. Similar roles and job titles include treasurer, director of finance and vice president of finance.

  • Responsibilities
  • Job Stats
  • Education and Experience Requirements
  • Additional Qualifications Recommended

Responsibilities

  • Lead all financial operations
  • Fundraising and investing
  • Risk management
  • Budget planning
  • Ensure regulatory compliance
  • Report to the board of directors
  • Participate in high-level decisions about asset allocation and strategic planning
  • Provide oversight for human resources, accounting and other offices within an organization

Job Stats

  • Employment numbers: According to the Bureau of Labor Statistics, the total number of top executive jobs in 2012 was 2,303,200. This number includes CFOs, as well as those in roles like Chief Information Officer (CIO) and Chief Operating Officer (COO).
  • Salary: The Robert Half 2015 Salary Guide for Accounting and Finance reports the annual salary range for CFOs is $105,000 to $465,750. Higher salaries are expected at companies with higher sales volume. Accounting professionals working at this level may also be eligible for bonuses and financial incentives on top of their salaries.
  • Projected growth: The Bureau of Labor Statistics predicts average growth for top executive positions, with an 11% increase expected from 2012 to 2022.

Education and Experience Requirements

  • A master's degree in accounting, business administration or a related field is generally preferred
  • Ten or more years of experience in positions leading to the CFO role

Additional Qualifications Recommended

  • CPA: The Certified Public Accountant license is expected at this level. The process includes an examination, as well as documentation of required education and prior experience as determined by each state.
  • CMA: The Certified Management Accountant credential is earned through the Institute of Management Accountants. The process includes work experience, an exam and continuing education.

Frequently Asked Questions

What does a management accountant do?
Management accountants work with their organization's executive management. They analyze financial data, including risk data, and provide reports so that managers can make strategic business decisions.
What does a management accountant earn?
According to PayScale, management accountants earn an average annual salary of $60,118. Prospective earnings grow depending on experience, location, and skills. High-value skills for management accountants include accounting, data analysis, and budget management.
Is there certification for management accounting?
Yes, employers often look for management accountants who hold certified management accountant, or CMA, credentials. The certification tests for skills in planning and analysis, performance management, and risk management and internal controls.
What are the qualities of a good management accountant?
A good management accountant needs leadership and communication skills. Employers also look for workers with a thorough understanding of risk management and business structures.
What's the difference between a budget analyst and a financial analyst?
Budget analysts plan budgets and collaborate with managers to ensure that projects adhere to the outlined specifications. Financial analysts work to improve financial operations for their companies through investments, cost management, and financial forecasting.


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