Question

Discuss the important roles of a management accountant in assisting the daily operation of a business.

Minimum 2 pages

Answer 1

ANSWER:

Management accountants use financial and non-financial data for use in the organization and development of its business. They aid managerial planning and commercial decision-making tasks by providing appropriate financial information and undertaking related accounts administration. They combine accounting, finance and management with the techniques needed to drive successful businesses.

• They may gather information on revenue, cash flow and outstanding debts to spot trends, gather stats, write reports that support day-to-day management decision-making and help drive strategy and planning.
• They tend to be more involved with general management, working with managers to analyse cost and revenues: the focus is on the analysis and reporting of a company’s financial position in order to provide insight into business performance.
• They work for public companies, private businesses, and government agencies.
• Their duties include: helping to choose and manage company investments, risk management, budgeting, planning, strategizing, and decision making.
• They provide the monthly management accounts, budgets and forecasts to aid business planning.

The important roles of a management accountant in assisting the daily operation of a business:

1.) Managing Employees: In making sure other employees at both Executive and Operation level perform tasks accurately and on time, teaching them new skills, advising them when they don’t understand things, and getting them back on track when they make mistakes, as well as, to pay attention to others’ preferred styles of working and interacting and be comfortable adapting to different personalities within the workforce, is the most important role of a management accountant.

2.) Managing External Stakeholders: They are likely to work with, not only the senior management and employees in other departments, but also with people outside the company as part of their job, including regulators, other organizations in the industry, and supply-chain partners, and also interacts with auditors, wholesalers, and indirect customers on issues ranging from reviews of new pricing proposals to strategic questions of whether to acquire or divest a product.

3.) Continuous Professional Development and Network Building: Management accountants are also often involved in professional associations like IMA. Membership in these groups helps them stay current on the most important issues and developments in their field and provides avenue to network with other management accountants and pursue lifelong learning through continuing professional education (CPE) activities.

4.)Supporting Other Departments: Management accountants at all levels help support other employees, not only within but also outside of the accounting and finance area. Accounting reports and other financial information gathered from other departments eases decision making in every company’s day-to-day operations (resource acquisition, resource deployment, manufacturing, distribution, etc.).

Understanding the financial impact of day-to-day decisions helps empower nonaccounting employees to make responsible, successful choices regarding company operations.

The ability to listen carefully is thus essential to a management accountant’s role, especially when they are not an expert in what other departments do.

5.) Advising Senior Management: Management accountants help those with the greatest level of responsibility for the organization’s performance make key decisions based on budgets, relevant cost and revenue data, and similar reports prepared by members of the accounting and finance team.

Management accountants also help senior managers in the organization to better manage assets, expenses, and risk. Day to day operations reports are collected by the management accountant from other departments and an analysed consize reports are provided to the upper management to assist in decision making on critical issues.

Upper management may seek the opinion of the management accountant on whether the company should expand its operations abroad or develop a new product line,etc.

6.) Business Planning: The most essential role a management accountant is to be forward-thinking, reviewing and analyzing the company’s past performance to inform plans for the future.

For instance: Planning an unexpected production from an existing customer. The Management Accountant should have crisis management capabilities through timely planning, direction,co-ordination between production department, suppliers, purchase department and execution.

Through budgeting and forecasting, management accountants help companies determine what course of action to take to achieve their goals. They inform decision makers about the company’s financial position and the likely impact of plans under consideration on the company’s cash flow, profitability, and other critical success factors.

7.)Cost Accountant, Strategist and Decision maker: The most important job of the management accountant is to conduct a relevant cost analysis to determine the existing expenses and give suggestions for the future activities, with relevant cost analysis to can make better and evidence-based decisions.

They perform a series of tasks to ensure their company's financial security, handling essentially all financial matters and thus helping to drive the business's overall management and strategy.

8.)Overseeing benefits and compensation packages: Employees are remunerated based on their performance or productive time. Hence timely review of employee benefits, Insurance schemes and related compensation policies are to be worked out carefully by a management accountant bringing in the confidence of both the Operation level and Management level.

9.) Crisis Management: Incases of lockdowns, trade unions non co-operation, strikes or natural disasters or new government policies, impacting the functioning of the organization, a management accountant should seek legal help, Auditor's advice, or find the best possible timely solution at the minimum costs. Technological updation is essential for a management accountant, as dicussed in earlier points, continuous updation and learning is a must in this changing techno friendly business environment.

10.) Management of Funds: From planning to execution process, everything depends on the availability of funds and application of such funds optimally to reap the intended returns. Hence, the management accountant needs to know extensively the Funds management. How to raise funds? What are the sources available and Risks associated in raising funds? How to plan an optimum fund application? are afew questions a management accountant need to find answers and prepare a draft report to the decision makers.

CONCLUSION:

Thus, a management accountant should essentially be a professionally qualified accountant with expertise knowledge of Principles of management, Cost accounting, Finance, Accounting, Taxation and other non-financial aspects, capable of analyzing and interpreting data. An excellent communicator and network builder internally and externally through professional networks and industry networks. Their role is immense in day to day operations as each decision impacts the functioning of an organization.