MANAGEMENT ACCOUNTING

Provide crucial and specialised financial information to internal stakeholders to support decision-making and improve the overall performance of an organisation.

Overview

Management accounting focuses on supplying economic information that can aid in a business’s highlevel decision-making processes. This is more than just preparing financial reports - in addition to their accounting abilities, management accountants bring in-depth knowledge of the business sectors they work in and a wide range of different skills such as planning, management, and strategy to the table. This combination allows them to provide specialised, businessspecific guidance.

The three pillars of management accounting are: planning, decisionmaking, and controlling. You may find management accountants drafting high-level strategies on cost management, revenue enhancement, and risk mitigation; or advising on more granular topics such as the economics of design, managing production line costs, staffing quotas, or the potential cost of deploying IT solutions.

Good management accountants often need to see a business from a complex global perspective, while still dealing with the specific, local issues of each process and how both factors interact and affect the company as a whole.

Career Pathways

There are various entry points

Since the purpose of management accounting work is for internal strategy planning, most management accounting roles will usually be inhouse within a company. You may, however, also find roles incorporating management accounting duties at management consulting and professional services firms.

Graduates typically start out in general accounting/finance roles in order to pick up various skills that will be useful for management accounting. If you intend to specialise in management accounting, you’ll need to obtain specialist professional qualifications from bodies such as the Chartered Institute of Management Accountants (CIMA) or the Association of Certified Chartered Accountants (ACCA).

Early responsibilities as a junior accountant may include crunching numbers for internal reviews and helping to prepare management budgets. Once qualified, you may be asked to work on more complex tasks such as product valuation, cash flow or inventory analysis, risk management, or identifying and forecasting future business trends.

Many of your duties will involve working closely with senior management, and advising them in decision making and strategy planning. A key difference between management accounting and financial accounting is that management accountants do not need to adhere to Generally Accepted Accounting Principles (GAAP) since whatever financial data they work with is only meant for internal review. You may, for example, be asked to come up with unique processes to track and measure specific financial information that senior management wants to keep an eye on.

Given the specialised skill sets that management accountants pick up on the job, your career could progress laterally as well as vertically. You could work your way up to becoming a partner in a business, or move amongst other companies operating in the sector you specialise in. Another possible option might be to switch career tracks and venture into management consulting instead.

Required Skills

Because management accountants play a crucial role in supporting business decisions, you must have excellent business acumen and a good understanding of the organisation’s goals and objectives. Good decision-making skills and the ability to communicate clearly and effectively are essential as well.

Having strong strategic thinking and problem-solving skills are also key. You should be able to analyse financial data and provide insights to support decision-making at all levels of the organisation. You must also be able to offer solutions on how to enforce those decisions and ensure that they are adhered to.

Strong project management skills are also essential for management accountants. They need to be able to manage multiple projects simultaneously, set priorities, and deliver results in a timely manner. They should be able to work well under pressure and meet tight deadlines.

You should also be familiar with technology and software tools that can support your work. This includes accounting software, data analysis tools, and large-scale management software such as SAP or Oracle. Knowledge of such platforms, however, will often be picked up on the job.