What Does a Management Accountant Do? Definition, Duties and Salary
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Accounting is a key function in a company that ensures it stays fiscally responsible and legally compliant. In-house accountants often work on narrow tasks and don't take part in the decision-making process that determines a company's strategy, unlike management accountants, who hold a significant decision-making responsibility. Understanding the role of a management accountant can help you determine whether it's a suitable career path for you. In this article, we answer the question, "what does a management accountant do?" and show steps you can take to help you begin this career.
What does a management accountant do?
A management accountant combines the duties of a middle or top-level manager while using their accounting skills and knowledge on the job. Management accountants perform a wide range of accounting-related tasks, including choosing and managing company investments, managing risk and driving decisions regarding budget and broader market strategy. These professionals often use standard accounting practices to find numbers that reinforce the strategic decisions of a company. They may contribute to one or all of the following areas:
Using the financial and compliance expertise of accounting, a manager can proactively contribute to the strategic decisions of the company. In this position, you can consider the long-term industry trends to make good decisions. Being aware of your company's resource use and stakeholder attitudes can help suggest broad directions for the firm. Strategic management decisions often require deep expertise in operational and compliance management and in the ability to foresee market trends and industry shifts. The core of strategic management is the ability to assess business needs and provide research-backed suggestions that help the leadership make prudent decisions.
Performance management focuses primarily on quantifiable performance indicators, like sales or product output. Performance managers often rely on strong maths and statistics skills to measure and analyse performance and help find ways to improve it. This is a tactical field, with managers primarily looking at ways to improve specific processes rather than defining broad strategies or goals. Solid accounting skills can contribute significantly to your productivity because this field relies on mathematical modelling and quantitative verification of performance. As a management accountant in this field, your core goal would be to help the company minimise costs while increasing profits.
Risk management is the process of assessing, quantifying and developing strategies to mitigate risk. Many different risk categories can affect a company. From legal and compliance to broad economic changes, the risk is present in almost every operational, strategic and fiscal decision of a company. An accounting background can help you lead risk management projects and ensure proactive compliance with financial and operational regulations. Confident knowledge of local and international compliance concerns and financial regulations can help you maximise your professional contributions.
How much does a management accountant job pay?
The average salary of a managing accountant is around $286,706 per year. There are a variety of factors that affect a managing accountant's salary, from seniority in the organisation to the specific industry. Larger corporations and financial institutions tend to pay more. They may offer a significant portion of your compensation in bonuses and stock options.
Management accountant salaries tend to rise steadily with experience. If you progress to senior or C-level positions, compensation generally rises significantly as well.
Why are management accountants important?
In this career, you can provide significant value to an institution by bridging the gap between the finance and accounting departments and senior management. Through their expertise in a variety of accounting practices, they can help interpret quantitative data and give useful insights into the business climate. As experienced management professionals, they can also provide strategic and tactical advice to the enterprise and suggest the right approach to measure and track the implementation of strategic initiatives. By deploying their communication and persuasion skills, along with their accounting acumen, management accountants can help coordinate among stakeholders with competing interests.
What do management accountants study?
A bachelor's degree is an extremely common minimum expectation among management accountants. In addition to a university degree, they often have specialised education in accounting or finance. However, these specialised degrees aren't a requirement to attain the professional credential of a Certified Management Accountant or CMA. Many management accountants choose to continue education beyond a bachelor's degree, with a Master of Business Administration or MBA being a common credential.
These accountants tend to study advanced accounting topics, whether through a formal programme or on their own. Beyond a CMA, many professionals choose to obtain the Chartered Global Management Accountant Designation or CGMA. This credential certifies that you received the skills and knowledge to manage complex accounting structures of multinational and international companies. Many management accountants also hold a certified public accountant (CPA), though this is not a requirement.
What is the career progression for a management accountant?
Management accountants often start as accountants, gaining experience and understanding the basics of corporate finance, accounting and compliance requirements. If you distinguish yourself in your job by learning the strategic needs of the business and providing your accounting insights to help your business address these needs, you may be able to advance your role. Building a solid record of contributing to strategy and decision-making initiatives can position you to become a management accountant. The key to advancement from accountant to management accountant is often in the willingness to take on responsibility and look for strategic and decision-making roles.
While there are no set minimum educational requirements, advanced study or obtaining a post-graduate degree can help advance your career. Advanced business management and leadership education can also provide a boost if you already have a solid accounting foundation. Finding a project and strategic initiatives in which you can apply your quantitative and strategic decision-making skills can show your dedication to your career growth and win confidence among your trainers and managers. Besides education, experience with practical application of accounting skills in conjunction with decision-making helps solidify your role as a management accountant.
How to become a management accountant
Finding a job as a management accountant is usually a multi-step process. Becoming a management accountant involves developing a variety of skills and earning the trust of a company's leadership through your work and education. Consider following these steps to help you begin your career:
1. Obtain an accounting job
If you're a fresh graduate in accounting or finance, you're well-equipped to find a financial analyst or accountant position. By working in this capacity you have a chance to understand the basic accounting processes. This is also a great opportunity to learn about the strategic needs of your company. By volunteering to be involved with projects that require decision-making skills, you can become familiar with the job of strategic management.
2. Build a solid decision-making track record
Because management accountants combine the strategic decision-making ability with quantitative rigour, you may want to purposefully develop competence in both skill sets. Continue to pursue advanced accounting education and an understanding of overall business strategy. Obtaining additional credentials, whether an MBA or other advanced accounting and finance certifications, can help speed up your progress. Ultimately, your experience and the reputation you build can contribute significantly to your ability to obtain a management accountant position.
3. Demonstrate your ability to perform as a management accountant
As you grow your skills and reputation, continue to find opportunities to show core strategic leadership skills. Beyond participating in projects of strategic importance and find initiatives you can lead. Show your ability to use accounting and quantitative analysis to inform strategic decision-making and deliver useful results to your employer. At this point in your career, you may be able to obtain a job with the title of management accountant, but even if you're not formally recognised with the title, you can build a portfolio of projects that show your strategic management skills.
4. Formally advance your career
After you establish a level of expertise in both strategic management and accounting, consider obtaining a formal certification of Certified Management Accountant. This certification can streamline your job search process and help you earn a higher salary. Two certification bodies can grant you this designation, the Institute of Management Accountants (IMA) and the Australian Institute of Certified Management Accountants (ICMA). The specific requirements of each certifying body can differ, so gather some research on each pathway in advance.
The IMA certification requires two years of active accounting experience and the passing of a rigorous examination. In addition, you may pursue continuous education and active membership in the IMA to maintain your active status. The ICMA certification requires formal study with the institution. Several pathways to this certification are open for both, young and mature professionals.
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Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.