What is management accounting and what does a management accountant do?

The role of a management accountant combines accounting, finance and management to prepare internal financial reports and provide insight into business performance. The objective is to help senior management use financial information to inform business strategy, as well as contributing to decision-making that will ensure business growth and long-term success

Management accountants use financial and non-financial data to paint a complete picture of the business. They may gather information on revenue, cash flow and outstanding debts to spot trends, gather stats, write reports that support day-to-day management decision-making and help drive strategy and planning

Professionals in this field will oversee the development of accounting procedures and financial policies, as well as preparing forecasts, budgets and risk analysis. They often contribute to efficiency and cost reduction through the identification and implementation of more effective processes and strategies and may also have accountability for establishing and maintaining management information systems.

Key responsibilities

  • Preparing the monthly management accounts, budgets and forecasts to aid business planning
  • Informing key strategic decisions and formulating business strategies to generate shareholder value
  • Advising on the financial implications of business decisions
  • Developing and managing financial systems & policies, and identifying opportunities for improvement
  • Controlling and forecasting income and expenditure, and ensuring expenditure is in line with the budget
  • Recommending strategies to reduce costs
  • Analysing and managing risk
  • Negotiating and obtaining finance for major projects
  • Offering professional input on financial matters and advising on ways of improving business performance
  • Effectively communicating financial data to non-financial managers

Why are they important?

The analysis of business performance and key financial data provided by management accountants is highly valued for the important role it plays in informing senior management

Where financial accountants may focus on preparing reports based on past performance, management accountants prepare, develop and analyse current financial information and non-financial data with the objective of allowing informed decision-making. This can be to help management make decisions in the present or using budgeting and forecasting to support project assessment and long-term strategy aimed at securing stability, growth and profitability

Skills needed for this role

Management accountants must have excellent numerical and analytical skills, along with strong attention to detail. Critical and strategic thinking skills are key and these professionals should be highly organised in their approach. A solid commercial awareness is required, as is the ability to liaise and influence at a senior level.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Advanced Performance Management

Career opportunities presented by this role

Any organisation with an accounting or financial department may employ a management accountant and they are widely employed by financial institutions. With at least five years’ experience, these professionals can progress to senior roles such as financial controller, finance director or chief financial officer (CFO).

Competencies

High level competencies required include:

  • Data, digital and technology

    A. Identifies strategic options to add value, using data and technology.

    B. Analyses and evaluates data using appropriate technologies and tools.

    C. Applies technologies to visualise data clearly and effectively.

    D. Applies scepticism and ethical judgement to the use of data and data technology.

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

  • Management accounting

    A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.

    B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.

    C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.

    D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Strategy and innovation

    A. Applies business acumen and commercial awareness to deliver business objectives.

    B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.

    C. Evaluates, justifies and implements suitable strategic options.

    D. Adopts and applies innovative methods to implement strategy and manages change.