Managerial accounting is a field that is growing all the time. Firms are eager to learn how to improve on their existing operations and the projected efficacy of venturing into new markets. Business owners need someone to review their cash flow, income sheets, and other financial statements but who can also examine the trends and overall business atmosphere so that they are sure to make the next right move.
If you have a mind for business, talent for numbers, and the requisite technical skills, this is a terrific career path to pursue. Whether your career is as a dedicated internal auditor for a single firm or a jet-setting management analyst, you are sure to find endless challenge and satisfaction in this field.
What is a Managerial Accountant?
A managerial accountant is an accounting professional who works primarily with management and keeping track of teams and groups if not whole departments. A managerial accountant will most often work on internal audits which are designed to answer questions about a firm's inventories, payroll, financial statements, revenues, and more. Their reports are not released to the public as management accountants are intended to help a firm streamline its operations and become more competitive in the marketplace.
Steps to Become a Certified Managerial Accountant:
The first step to take towards a career in managerial accounting is to determine that this is the path for you. You will first want to have a fascination with business. If you find yourself reading the business section of the newspaper or returning to websites and YouTube channels that discuss commerce, then you might want to pursue this as a career.
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For accounting in particular, you will need to have a good head for numbers. If your favorite classes are math and science-oriented, then you may have the innate talent needed to pursue management accounting. If you are still in high school, you should sign up for any accounting courses your school offers. You might also find educational resources online that will help teach you the basics.
Aspiring management accountants might also look for personal characteristics that indicate a dedication to continual maintenance and development of their skills. Since a managerial accountant needs to not only analyze but to advise, it’s important that you are dedicated to helping organizations grow and thrive.
The second step is to complete the requisite education necessary to get started in managerial accounting. To become a management accountants, you might first start with an associate degree in accounting. If your community college offers a specialty in managerial accounting, you should opt for that. Nevertheless, once you complete your two-year associate degree, you should be able to start an entry level job, often as a bookkeeper or accounting clerk.
An associate degree in management accountants will also help management accountants in the long-term. That's because the typical community college curriculum includes the core curriculum required by most any four-year college or university. However, discuss this with your academic adviser who can help clarify how their credits transfer.
When you're ready and you enroll in a four-year college or university you won't have to bother with the core curriculum courses such as composition, college algebra, and various elective courses. You'll thus be able to dive into your accounting coursework and complete your accounting degree program.
While if you have an associate degree and lots of experience you might be able to work your way into a top accounting position with a firm, your chances are vastly improved if you complete a bachelor’s degree in accounting. That's because a full four-year curriculum will allow you to dive deeper into your courses. Your bachelor’s accounting degree program may even include courses that allow you to explore managerial accounting in great depth. You are also more likely to land prized internships under a managerial accountant in top firms.
Many states also require a bachelor’s degree in accounting if you wish to pursue a state CPA license. You may need to take a few additional courses to satisfy your accounting board's educational requirements, but with 120 credits from your undergraduate degree you will be well on your way. Your degree will also qualify you for many accounting certifications.
Once you have completed your degree in accounting with a concentration in managerial accounting you should consider working for at least 2-3 years before pursuing additional credentials. Once you're ready, however, consider pursuing a master’s degree. When you seek out graduate accounting degree programs you will be faced with a number of options from two main degree types.
On one hand, you can choose a Master of Business Administration with a concentration in accounting. The other broad category is a Master of Science in Accounting. Your choice will come from your experience and your long-term goals. The MBA is perhaps the best choice since that curriculum provides a strong foundation in general business courses. This will provide the academic credentials you need to enter the c-suites.
A Master of Science will also do great things for your long-term advancement, including your salary. You should investigate the program and weigh its offerings against your experience and goals. You may already have a strong managerial resume and thus will want to focus exclusively on accounting. The Master of Science in Accounting may also be a good choice if your current employer offers ample opportunities in return for your hard academic work.
What Does a Managerial Accountant Do?
On a day-to-day basis, a managerial accountant reviews their firm's numbers and runs them through various models. Sometime the objective of an internal audit is to determine how previous activities resulted in positive or negative outcomes, or to clarify their true impact, both for good and ill. An internal audit may also seek to provide a prediction for future growth or to determine the firm's general trajectory.
As part of their analysis, a managerial accountant might interview various department managers or employees. Their input may provide valuable background that the stark numbers do not illustrate. Management accountants might also rely on financial information form comparable companies as a way to provide added context for their assessments.
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Once the managerial accountant has completed their analysis, management accountants then need to assemble their work into a presentation for the firm's management and C-level executives. This presentation includes well-written overview statements as well as more detailed analysis of the accountant's findings. These documents include graphs, charts, and other visual elements. The managerial accountant's presentation is often printed for executive review but may also be used in a slideshow presentation using PowerPoint or some other presentation software.
Managerial Accountant Skills to Acquire
- Communication: A key part of managerial accounting is the ability to present your analysis and conclusions to the management teams in your firm. You will need strong written and spoken communication skills.
- Spreadsheet Programs: You will certainly need to have a complete mastery of Microsoft Excel. There are alternatives, such as Libre Office's Calc, but if you master Excel those skills should translate to Calc or Google Sheets. Make sure you learn how to write macros and are proficient with creating macros to suit your needs.
- Collaboration: A managerial accountant tends to interact more with the other departments in their firm than financial accountants. That is, management accountants need to work side by side with various departments in order to determine where improvements are needed.
- Margin Analysis: This skill is invaluable as you seek to describe where the firms primary profit centers are. This analytical method also helps you find inefficiencies in your firm's operations which may be impeding profitability.
- Trend Analysis: Most businesses are keen to know where management accountants are headed or how to best face the future. Management accountants need to be able to assess their firm's trajectory from the past to the future. This might take into account industry fluctuations, social trends, and factors related to the resources necessary to conduct business.
While the surest way to become a certified management accountant is by the traditional academic routes, there are other ways to launch and conduct a stellar career. You will need to start with at least a two-year associate degree, since there are few ways to learn accounting otherwise.
Once you have a two-year degree in accounting, you can begin an entry-level position. If you work hard and position yourself correctly you can accrue the sort of experience you need to advance. Along the way you should probably work hard in your off-hours to learn everything you can about management accounting. It will also help to have a mentor who is a practicing professional accountant.
Keep in mind that this approach to your management accounting career will require that you land the exact right job with the right company and people. There is much left to chance when you forgo at least a bachelor’s degree in accounting. However, it is possible. One way that you might improve your odds of success is to work in an actual accounting firm where you will be surrounded by management accountants.
Managerial Accountant Career & Salary
Where Might You Work?
Management accountants generally do the bulk of their work on computers. Management accountants spend long hours slaving over Excel spreadsheets and crafting presentations for their employers or clients. Your career can include work with private companies, Wall Street corporations, non-profit organizations, or government agencies. For the latter two, your education should probably be focused on the non-profit and governmental sectors.
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While many accountants do report to the same offices every day at the same time, you can also pursue a more dynamic career as a consultant. A managerial accountant will find that firms worldwide are eager to have them work for them on a contract basis. These jobs may last a few months, while some may keep you busy for a year or longer. Consultants often travel a great deal, but management accountants are also paid quite well for their time.
These days, you might also be able to conduct a lot of your business from home. If you are a particularly well-paid consultant, the client may want you to visit in person several times over the course of your project, but you might be able to take all of your financial data home and work on it with your favorite pet at your feet.
Accounting is one of the safer occupations in the economy. Every company needs to conduct periodic audits of its book. A managerial accountant can help firms assess where they've been and project how to get to where management accountants want to be. Even in a down market, management accountants are necessary to help weather the storm.
According to the U.S. Bureau of Labor Statistics (BLS), management accountants and auditors are in demand and their field is growing at a satisfactory pace. The government agency reports that the employment sector is reporting a median salary of $71,000 per year with the typical entry-level academic level of a bachelor’s degree. The BLS projects that management accountants and auditors should expect their field to grow by 4% through 2029. This is an average growth rate.
A related field, management analysts, are said to be doing slightly better. This employment sector reports a median salary of $85,000 with the same level of education. Their profession is also growing, but more than twice as fast as that of management accountants and auditors. Management analysts are projected to see an 11% rate of growth through 2029.
Advancing From Here
For a managerial accountant, the sky is the limit. The current job market rewards those with a degree and industry certifications. With the right experience you can go very far. You can also land a terrific position with an associate degree.
Then there are those who return to school for a master’s degree. Whether you pursue a Master of Business Administration, a Master of Science in Accounting, or a Master of Accountancy you are sure to be groomed for the c-suites.
There are many different jobs and careers you can pursue with a degree in accounting. Managerial accounting in itself can be suited to a variety of different paths which are sure to provide a lifetime of satisfaction and ample pay. For instance, you could start your career in an accounting firm and then move on to become a top accountant for a manufacturing company. From there you could become an independent consultant or start your own firm. The following is a brief sampling of the jobs you might find as a managerial accountant.
- Accounting Manager:
This position requires a minimum of an associate degree and five years of work in advanced bookkeeping or a related position with two years in management. Candidates should know Quickbooks Online, Splashtop, Financial Cents, or other similar software packages.
- Project Controller:
This position has you working with the US military to keep its projects on budget and on schedule. You'll need to review cost estimates for accuracy and seek to keep the project(s) within budgetary constraints. While management accountants prefer a master’s degree, the also consider applicants with a degree and experience. If your combined credit hours and years in the field can be equated with a graduate degree in Accounting or an MBA, you should apply.
- Accounting Generalist:
This position is seeking applicants that have at least an associate degree in accounting and at least 3-4 years of experience. The hiring company wants someone who is seasoned with both accounts receivable and accounts payable.
- Management Consultant:
In this position, your accounting skills will help you provide a quantitative analysis of a firm's operations and systems. This job asks for experience of at least 5 years and a bachelor's degree, or equivalent experience.
- Internal Audit Consultant:
For this highly technical position, employers may be looking for an accountant with a bachelor’s degree as well as professional certifications such as CIA, CISA, CISSP, or even a CPA. To qualify, your background should include technical skills such as financial audits, compliance audits, and contracts compliance, among other abilities.
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Frequently Asked Questions
What are the responsibilities of a managerial accountant?
A managerial accountant is responsible for producing and analyzing financial statements, reporting data to the CFO, and managing the accounting staff.
What is the most important role of management accounting?
The most important role of a managerial accountant is managing risk, strategizing, planning, and making decisions.
What skills does a managerial accountant need?
A managerial accountant must be able to work in a team and should have good communication and written skills. Management accountants need to have excellent analytical and mathematic skills. Management accountants also need to have attention to detail and sound business knowledge.
Where does a managerial accountant work?
Managerial accountants can work in a number of different places. Management accountants can work for private businesses, government agencies, and public companies.
What are the five major types of accounting?
The five major types of accounting include managerial accounting, industrial accounting, cost accounting, corporate accounting, and private accounting.