What Is Management Accounting? Jobs, Skills, Salary, Education

Management accounting is a field of accounting that supports companies with vital financial processes. Its goal is to help businesses make important decisions that have financial implications.

You must have a solid education, certifications, and experience to work in this field. Discover more about the discipline of management accounting, the various job titles it covers, and the salary you can expect. 

What is management accounting?

Management accounting is the process of analysing and interpreting data to make informed decisions about the business operations of an organisation. Someone who works in management accounting will likely conduct:

• Internal audits

• Analyse the financial performance of the company

• Monitor spending and costs

• Predict future needs

Management accounting aims to aid decision-makers by providing accurate information about a business’s financial operations. 

Management accounting vs financial accounting 

The major difference between the two accounting types is that management accounting focuses on strategic decision-making within a company, while financial accounting provides analysis for external use. 

Management accountant job titles

Your job title in management accounting varies based on a few factors, including:

• Size of an organisation

• Level of experience

• Type of industry

• Required credentials for reporting financial information 

Roles, responsibilities, and job titles may vary widely in this field. A few common job titles in management accounting include the following: 

• Controllers act as the managers of the financial department and will likely report to a supervisor, like an accounting manager. Their job is to gather financial data and prepare documents according to the needs of the end user. 

• Financial analysts or accounting analysts mostly focus on analysing key financial documents and creating reports and presentations for decision-makers in an organisation. They may note trends, offer financial advice, and determine a company’s value. 

• The chief operating officer (COO) is likely the decision-maker of a company’s financial choices. They use financial reports that management accountants compile. In an executive position, the CFO is the one to execute financial strategies and develop plans based on financial status.  

• Accounting managers manage financial processes such as cash flow monitoring, company-wide audits, and budgeting. They oversee a financial department and report to the company's executives and decision-makers.  

Management accountant responsibilities

A management accountant’s responsibilities are central to analysing and interpreting a company’s financial information. Since a management accountant may work in various industries, the responsibilities may vary, but some common tasks include: 

• Perform cash flow analysis to help make decisions that involve company purchases 

• Make predictions and forecasts for future spending

• Prepare financial statements

• Determine price points for goods and services 

• Plan out the total costs of goods and services

• Monitor performance metrics (e.g., debt-to-equity ratios)

• Calculate inventory turnaround 

• Manage deficient accounts receivable 

• Use performance reports to note changes in budget or to set budgets 

• Evaluate the financial performance of a company 

• Suggest financial investments such as stocks and bonds or other investments 

• Monitor sales, costs, and spending 

• Conduct internal audits 

How much do management accountants make? 

The salary ranges for management accountants will vary by job title, industry, location, level of education, certification, and years of experience. According to Glassdoor, the average salary for management accountants in the UK is £39,879 annually [1].

What skills do management accountants require?

Management accountant jobs require financial and business skills, so it’s essential to demonstrate proficiency in both. You will work with a company's financial dealings and day-to-day operations. As a result, you’ll be best equipped in this field if you can be analytical and realistic in aligning decisions with a company’s goals and plans.  

Some competencies to have to be successful in management accounting include the following:

• Excellent analytical and numerical abilities: As a management accountant, you will spend most of your time making sense of financial documents and translating that data into easy-to-understand reports. Management accountants do this through data analysis tools like Excel spreadsheets. 

• Accuracy and an eye for detail: It’s important to have an eye for detail to find discrepancies and errors and to spot patterns and trends that can be used when creating budgets and forecasts. 

• Have business knowledge: Understanding the industry and how your company functions in that space can help you to understand the financial status of your company better and devise strategic plans. 

• Good oral and written communication skills: From oral presentations to written reports, a large portion of your work in management accounting will be translating complex financial processes, reports, and statements into easily digestible content. 

Is management accounting right for you?

Management accounting may be right if you enjoy working with data, numbers, and finances. Management accounting can be a rewarding and exciting career, especially with evolving technologies that make data analysis and collection even more precise. Consider the following things to determine whether this field is for you: 

• You want to do something that requires analytical skills: If you have the patience and attentiveness to study data for patterns or trends, this might be a career for you. Data analysis requires examining the details and interpreting results from your findings for presentation. 

• You have an interest in working in management. Multiple managerial positions are available in this field, making it a great choice if management is one of your future career goals. 

• You're good with numbers: Management accounting is a subsection of accounting, so you will need to be very comfortable with numbers and proficient in basic skills. 

• You feel passionate about accounting: Beyond proficiency in mathematical and analytical skills, if you enjoy the challenge of balancing books, setting budgets, and problem-solving, this field might be for you. Accounting requires critical thinking and deductive reasoning.

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Steps to becoming a management accountant

To become a management accountant, earn a degree in accounting, gain professional experience, and qualify through certification. Here are six steps to make a start in management accounting. 

1. Consider a degree in accounting.

Earning a bachelor’s degree in accounting, finance, business management, or a related field is the first step in becoming a management accountant. Although a degree isn’t essential, you will need one to pursue certification. Many employers prefer a postgraduate degree since this is a management position within a company, so consider pursuing your master's in management accounting if necessary. 

2. Gain professional experience. 

After obtaining a degree, build your skills while gaining experience to prepare for future employment or certification. You may also want to pursue advanced degrees. Professional experience isn’t essential for pre-entry but will be useful later and may be necessary for certification. 

3. Complete a professional qualification

To qualify as a management accountant, you must complete training with a professional body. You have several options to consider. The Association of Chartered Certified Accountants (ACCA) is a popular route. To qualify to work as a management accountant, you’ll need to complete the Advanced Performance Management (APM) and Advanced Financial Management (AFM) options and pass the exams as part of your training.  

Another popular option is to train with the Chartered Institute of Management Accountants (CIMA). This option helps you progress in your career to more senior, well-paid positions. To qualify as a Chartered Management Accountant, you need to complete the CIMA Certificate in Business Accounting (Cert BA), followed by CIMA’s CGMA Professional qualification. You complete these qualifications on the job once you find a suitable training placement.

4. Getting started in the field.

When you’ve met the educational and experiential requirements to get into management accounting, it’s an ideal time to network and continue building relevant skills. Be prepared to start in an entry-level position in a finance department within an organisation. Focus on gaining real experience in this role and finding opportunities to hone your skills to advance in management accounting. 

Next steps in management accounting

Management accounting can be a fast-paced and rewarding career choice with various job opportunities. You’ll need a degree to become certified and have relevant experience. 

Start your career by enrolling in an accredited programme and building your skills with online courses. Consider the Managerial Accounting Fundamentals course offered by the University of Virginia. It covers topics in managerial accounting, cost volume analysis, cost allocation, and more.  

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Managerial Accounting Fundamentals

This course, developed at the Darden School of Business at the University of Virginia and taught by top-ranked faculty, will teach you the fundamentals of ...

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Skills you'll build:

Resource Allocation, Accounting, Cost Accounting, Decision Making, Budget Management, Financial Analysis, Operating Cost, Management Accounting, Cost Benefit Analysis, Cost Management, Financial Accounting