Let's face it - the costing and analysis that accountants use their skills for to crunch data and figures aren't very sexy. We know it's a career more on the practical level than the exciting one.
Don't be fooled though because time, work, skills, and experience are really needed when it comes to the business of good financial and management accounting, and accounts and their professional knowledge and training can help a company or business in Australia or overseas make the most viable financial decisions possible.
The accountants are truly the ones who work and carry out tasks behind the scenes to help a company shine externally.
The work of an accountant is nevertheless crucial to the future of a business since the support they give provides analysis of costing, unit by unit, and can help manage professional systems and source funding for financial decisions that can help support a business to reach its full potential.
Such work however is more on the business of the people on the financial accounting level, who spend the years of their bachelor degree learning how to adhere to international reporting processes.
The management accountants are the ones who were bachelor students that decided they wanted to have an impact on intra- company operations.
Today, Superprof will run you through the working processes, kinds of training and skills, and kinds of systems you will work with as a managerial accountant in Australia, and give you information to help you gain access to the CMA (Certified Management Accountants Australia).
This doesn't simply refer to more senior general accountants, rather to those specialised professionals who work predominantly internally with a company.
Their education in decision-making skills, cost and financial data analysis, business and tax systems knowledge, and good knowledge level of company objectives makes these people an indispensable asset to any organisation.
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What Do Management Accountants Do?
You will of course have some idea of what accountants do without having a degree in finance. Management accountants in particular are sometimes known as cost accountants, private accountants, industrial accountants, professional service accountants, or corporate accountants.
No matter where they work in Australia or what title they have, they will all have similar tasks and similar years of experience in the field.
The similarity with financial accounting is that both are based on the study and analysis of data and unit movement, but the kind of professional systems and costing work that management accountants do is to support internal processes rather than for external stakeholders.
Management accountants are all about making short work of budgets, strategy, risk assessment, and a full cachet of issues that may face a company.
Given the wide range of skills and varying knowledge levels that would respectively apply to each of these, time-saving and cost efficiency is maximised in a larger corporation by splitting this work between many people.
With this in mind, throughout the course of your career, virtually from the moment you graduate from an accounting, business, finance, or management bachelor degree until well into a position of seniority in the future, you will be working towards particular decision-making processes for certain projects rather than the company as a whole.
Let's illustrate how this would look with an example.
There is a firm that wants to sell spa salon products that is based in Australia, but wants to branch out and franchise themselves into the Asia-Pacific region.
If the company were big enough, there would be a team of internal management accounting professionals who would assess the viability of such a move.
They would start spending hours, weeks, or even a year or two years (!) working through, unit by unit, what the cost-benefit analysis of this venture would be, based on assets and inventory that can translate into direct revenue.
Then the head of such a team would use their experience and knowledge to help level everyone else out when strategising where the company could source funds to cover such costs if going public or international, all whilst working out the many tasks needed to end up making an impact in the new target market.
This would include thinking asking:
What kind of incentives will there be to get customers in store in the new region? What are the ideal locations for shops and how can advertising match this? Will there be education costs for training or to upskill the new staff?
Anything to do with budgets is the business of such a team, and their job would be to think short term, medium term, and long term how the company could best balance its costs and income.
The skill for this truly comes from learning from previous mistakes a company may have made, or successes that might have been taken for granted.
These were probably students of maths and business at some point before becoming an accounting student and turning their eyes and study to professional services, so with this in mind, reporting and preparing official statements and justifications for decisions, as well as how to bring them to fruition in the short term, will be within the wheelhouse of such a team.
The current earnings and financial profile of a business would be taken into account whilst carefully exploring where to apply funds in a new market so as to keep a similar market position in Australia (or the original location).
Overall, however, do not forget that these professionals are mostly advisory, and the executive will put plans into motion. Nevertheless, if the accountants don't think it's a good idea, the decision making body will listen!
The role financial accountants is also crucial in keeping an economy afloat.
What a Managerial Accountant's Workday Looks Like
Tracking income, assessing tax liabilities, and analysing expenses are run of the mill but will always take place. This information then gets put into income statements, which a senior management accountant would look over to suggest budget changes based on current performance and forecasting. Such data would then be given to company executives.
Then, in order to achieve better efficiency, streamlining propositions will be sought once the bottom line has been achieved, such as by reducing financial waste or downsizing.
Such professionals will also be responsible for keeping certain departments in check and making sure they keep to their budgets thereby not incurring extra costs.
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Required Knowledge and Skills
You do admittedly need a head for numbers to become a great accountant, but there is a big social and economic impact you can have as well.
Certain principles in Australia such as the GAAP (Generally Accepted Accounting Principles) are used to guide the ethical side of accounting practice, and this is also essential knowledge for individuals in the industry.
Tax principles also obviously come into play since these have an impact on the net earnings of a company, and how different tax situations can suit certain ventures.
Overall general accounting principles such as bookkeeping are necessary too as you will need these sorts of practicalities day to day.
But there is so much more that a human needs to do, that's why it's not just computers that do the bookkeeping!
Understanding business communication, including presentations, professional communication styles, and persuasion tactics are also necessary since you will work in a corporate environment most likely.
In order to know the differences between management accountants and financial accountants, have a read of our guide.
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Know Your Business Inside and Out
On top of the general practices you need to be familiar with, your own company needs to be at the core of your operations too, be they national or multi-national
If you're dealing with the latter, the IFRS (International Financial Reporting Standards) would apply to you, and you would also have to know this exceptionally well, especially if you want to have a more diverse career.
Production standards and processes will also boost your CV, so if you want to move sideways to another similar company, this can be of benefit.
These are all great things to think about if you're currently taking a professional accounting course, doing a bachelor degree in business, doing an MBA, or even making time for the CMA exam.
Thinking about what theory you want to put into practice is the most important thing, and will keep your job interesting for years into the future.
In order to become a Certified Management Accountant, the Institute of Management Accountants. is the international organisation you should consider registering with.
There's a host of benefits including terrific job opportunities that can arise from such an association.
If you want to see the more human side of accountants, check them out in some well-known films if you're feeling game:
- The Accountant: Well the name says it all here
- Schindler’s List: an accountant uses his skills to save thousands of lives
- Shallow Grave: recounts how an accountant leaves his ethics behind
- The Royal Tenenbaums: Danny Glover shows his quieter side
- Stranger than Fiction: Will Ferrell breaks the mould and becomes a highly personable accountant
These are just a few films where accountancy is featured, not the main storyline!
But accounting is the main topic in management accounting versus financial accounting!
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