Management accountants help with business planning
In the business world, there is an important difference between financial accounting and management accounting. Financial accounting compiles information that is important for corporate tax purposes, shareholder reporting, credit and creditors. Management accountants, on the other hand, focus on the organization and distribution of information needed to make sound decisions at the executive and managerial levels.
How Business Management Accounting Works
Financial management accounting is a business practice that typically remains private and is only accessed internally. Rather than using financial standards to report data, business management accounting is typically communicated using the management information systems (MIS) branches of an organization's internal controls.
Whereas financial accounting is typically all about what has already happened (in terms of revenues, expenditures, tax liabilities, appreciation and depreciation), management accounting focuses instead on what is going to happen. Its aim is to put the company's future in the context of its present financial state.
In some cases, management accounting can actually be a more accurate representation of a company's financial health, as financial accounting is often padded and manipulated to please shareholders while burying undesirable yet nonetheless true information. Business management accounting is all about communicating where things really stand so that company management can right the ship, if needed, and tap the right resources and assets at the right times.
Hiring Management Accountants
The certified management accounting (CMA) designation is one of many specific professional titles that accountants can hold. Other common accounting designations include certified public accountant (CPA), certified forensic accountant (Cr.FA) and accredited business accountant (ABA). Firms that specialize in management accounting will typically only have CMAs on staff.
As with any other type of business consulting or financial management initiative, you should always research the firms you're considering, to make sure they're able to offer the services an organization of your size needs. Larger firms have more resources to commit to larger companies, and boutique accounting firms are an ideal way to make sure your small business gets personal attention.
Certified management accountants are bound by a professional ethics code and confidentiality laws not to disclose any information about your company's financials to any third parties. You can hire a management accounting firm without any worry about how it may affect your financial accounting practices.