What Management Accountants Do
Management accountants help businesses make sound financial decisions. Like those in most accountancy positions, management accountants handle internal audits, balance books, and report financial data to those outside the company who require information. In addition to traditional roles, they also handle things like budgeting, risk management, cost management, and help the company decide what avenues to take that will lead to greater profitability.
According to data gathered by Investopedia, there is no traditional career ladder for someone entering into management accounting. Although some may begin as a staff accountant, others may start as an analyst. From there, they may transition into a senior level role, such as senior accountant or senior analyst, and then into a leadership role such as an accounting supervisor. Some even progress into executive roles, such as a Chief Financial Officer (CFO), but the positions vary by firm and a person can follow many paths , depending on what his overall career goals are.
Who would enjoy a career in Management Accounting?
Management accountants have to be very business-minded in addition to being fiscally-minded. On the financial side, an individual must be familiar with all standard accounting practices, tax rules, and general economics. On the business side, those in the field must be able to identify areas of improvement as well as predict challenges. Effective communication skills, public speaking and presenting, and some persuasiveness are also helpful. It’s a good career for someone who has an interest in both financial and operations-related facets of running a business. The field tends to attract those who enjoy both aspects, but also want a career that doesn’t dominate their life, as most management accountants work a standard 40 or 45-hour workweek.
Who mightn't like the career?
Smaller companies may only have a single management accountant, and the person may be called upon to do things outside of the normal expected duties. For this reason, the career isn’t a good fit for someone who requires compartmentalized work. At the same time, completing the same tasks over and over again is a core function of the position, so those who become bored or disinterested with repetitive tasks may tire of the position quickly.
A bachelor’s degree in a business or accounting-related field is generally the minimum requirement to get into the field. Most jurisdictions require management accountants to become certified to work as well, though candidates who obtain certifications even in jurisdictions with no requirements can command higher salaries as well. A CIMA Certificate in Business Accounting or Chartered Global Management Accountant designation through the Institute of Management Accountants (IMA) can be expected.
Many firms offer graduate schemes in which individuals can gain working experience while working on an advanced degree. Internships, particularly at large firms, are very competitive. This aside, each company has unique requirements for their management accountants, so it’s worthwhile to examine job descriptions in advance and spend time picking up extra hard and soft skills that companies are looking for in your area as you near graduation.
Moving into Management Accounting from another career
Those with a background in accounting, mathematics, or business have an easier time transitioning into the role. For further reading see: “The Definitive Guide to Accounting as a Second Career,” “Making a Career Change to Accounting,” and “Careers in management accountancy: it's more than just number crunching.”
Management Accountant (Junior Level)
Role: Management accountants in large firms often begin as analysts. In this position, they support senior accountants and handle much of the research gathering, statistical modeling, and may put together portions of presentations for upper management.
Management Accountant (Senior Level)
Role: After 2-3 years, many management accountants are given senior titles. Although the work is much the same as a junior-level management accountant, they’re often given more sensitive tasks or involved in jobs that advance their knowledge.
Management Accountant (Management)
Role: Managers oversee the junior and senior accountants. They’re also more involved in strategic decisions are often called upon to help explore options when decisions are being made.
Chief Financial Officer (CFO)
Role: Although not every management accountant follows the path to CFO, the executive position is the goal for many. CFOs handle the company’s risk management and oversee financial departments. Their jobs are largely strategic in nature.
Management accountants do not generally travel unless they reach the executive level.
Average: Data from PayScale indicates that pay is greatly influenced by experience level and certification. Base salaries average USD$56,000 in the United States, ₤33,000 in the United Kingdom, CAD$69,000 in Canada, and AU$80,000 in Australia.
Entry Level (0-5 years): USD$49,840, £31,020, CAD$51,750, and AU$69,600.
Mid-Career (5-10 years): USD$62,720, £34,980, CAD$77,280, and AU$82,400.
Experienced (10-20 years): USD$62,720, £35,640, CAD$68,301, and AU$88,000.
Late Career (20+ years): USD$68,880, £35,640, and AU$92,800. (Canadian salary not available.)
Chief Financial Officer: USD$134,000, CAD$141,000, ₤113,000, and AU$166,000.
Bonuses and profit sharing may add as much as USD$10,000 onto a management accountant’s salary.
Why Management Accountants move on
According to data presented on Accounting Today, most management accountants are happy in their jobs, and the field is growing rapidly. However, job security, ethical concerns about employers, and lack of challenging work can cause some to leave the profession. In these cases, almost any position related to accounting or business can be a smooth transition.