One of the few things every organisation has in common its reliance on consistently accurate accounting. A crucial element at the heart of every successful business, accounting refers to the measuring, processing and communication of important financial information. Even in instances where the organisation is non-profit or government-owned, meticulous accountancy remains a key priority.
The question being – what is management accounting? Or more importantly, what contribution does management accounting make to the success (or otherwise) of the organisation?
Management Accounting: An Overview
In the simplest terms, management accounting combines a series of processes for the purpose of providing financial information for internal use. Management accounting provides financial information for the executives, managers and employees within the company, enabling it to make proactive decisions to improve its performance.
You could therefore argue that management accountants work as strategic partners with the business, identifying ways to improve profitability, minimise outgoings and generally boost efficiency. Whereas everyday accountants may record the company’s financial performance, management accountants use complex data to target continuous improvement.
Or to put it another way, management accountants go further than traditional accountants by looking to explain “why” the company is performing as it is. Not to mention, whether anything can be done to improve its performance.
For the most part, traditional financial accounting prioritises the production of financial documents and statements for external parties – stakeholders, government agencies, customers and so on. By contrast, management accountants focus their efforts entirely on informing internal decision-makers. Working with a variety of specialist tools for management accounting, they’re able to direct important decisions regarding the company’s future.
A Working Example
In a working example, Mr. Adams is the owner of a new consultancy company. He decides to hire help to take care of both financial accountancy and management accountancy, creating a list of jobs to pass on to the respective professionals. The duties he intends to assign accordingly include:
Out of these responsibilities, the first two would be handled by a management accountant, while the rest would be covered by a financial accountant. In some instances, accountants cover a wide spectrum of responsibilities, while some focus exclusively on one side or the other.
As businesses worldwide continue to face the strictest financial rules and regulations in history, demand for the services of qualified accountants has never been greater. Irrespective of whether you explore management accounting or financial accounting, you’ll find a whole world of career options to explore.
Private businesses of all shapes and sizes now instinctively turn to accountants to help secure their financial futures. The same also going for non-profit organisations, where keeping a close eye on financial activities ensures their ongoing viability. Government agencies continuously hire talented accountants for positions in a more official capacity, while qualified accountants often choose to offer their services privately or on a freelance basis.
While it is often assumed that a formal degree is mandatory, this simply isn’t the case at all. Those who secure the services of capable accountants are far more concerned with their capabilities and competencies than their qualifications on paper. Nevertheless, it’s still important to demonstrate your educational background, to an extent considered acceptable by the client respectively.
Studying online provides the perfect option for those looking to combine a hectic schedule with high-quality accountancy studies. Here at Brentwood Open Learning College, our complete range of fully-accredited accountancy and finance courses is open to ambitious candidates worldwide. With no time restrictions, deadlines or qualification criteria to worry about, a career in accountancy could be more accessible than you might think.
For more information or to discuss your requirements in more detail, contact a member of the Brentwood Open Learning College student support team today.