What Is Managerial Accounting?
Managerial accounting, also known as cost accounting, refers to the recording and analysis of financial information. This field requires proficiency in math and at least a bachelor's degree. If you're interested in becoming a managerial accountant, continue reading to learn more about the career.
Managerial accounting is the practice of accumulating, interpreting and preparing the financial data of a company. This data is presented to the company's management team, who use it to make financial decisions that are beneficial to the company. Managerial accounting, which supplies data exclusively for use by company management, is not to be confused with financial accounting, which involves providing data to shareholders, regulatory bodies and other outside parties.
Important Facts About Managerial Accounting
|On-the-Job Training||Apprenticeships available|
|Key Skills||Strong mathematical foundation, clear written and spoken communication, attention to detail, critical and analytical thinking, reading comprehension, problem solving, time management|
|Work Environment||Accounting, tax preparation, bookkeeping, and payroll services; government agencies; finance and insurance companies; manufacturing companies|
|Similar Occupations||Budget analyst, cost estimator, financial analyst, financial manager, personal financial advisor, tax examiner and collector, and revenue agents|
In addition to reporting financial information to company managers, managerial accountants often work as part of corporate executive teams in the production of new products. This may entail preparing financial plans and developing cost-effective production strategies. As a management accountant, you may also make budgeting, cost management and risk management decisions. In some cases, you might fulfill financial accounting duties, such as writing fiscal reports for creditors or investors.
You'll generally need a bachelor's degree in accounting or a related field to become a managerial accountant, although some employers prefer candidates with master's degrees. During your bachelor's program, you may do an internship to gain some work experience in accounting, as well as complete a capstone course for graduation.
An accounting bachelor's degree consists of several accounting and business courses, in addition to the general education curriculum and electives. Some of the accounting courses you might take include:
- Financial and managerial accounting principles
- Intermediate and advanced accounting
- Accounting information systems
- Cost management
- Income taxation
- Accounting ethics
- Accounting for government and not-for-profit organizations
After gaining experience in the field, you may choose to become a Certified Management Accountant (CMA). Offered by the Institute of Management Accountants, the CMA credential is available to managerial accountants with a bachelor's degree in accounting and two years of experience (www.imanet.org). Candidates must also pass a comprehensive exam and follow the organization's professional conduct code. A few of the topics covered on the exam include capital structure, financial statement analysis and risk management. After becoming certified, you'll need to meet continuing education requirements to maintain your credential.
Salary Information and Career Outlook
In May 2018, the U.S. Bureau of Labor Statistics (BLS) reported that accountants and auditors in general earned on average $78,820 per year (www.bls.gov). The middle 90% of these professionals made between $43,650 and $122,840 a year. Those employed in the management of companies and enterprises earned on average $80,020 per year.
The BLS also reported that job opportunities for accountants and auditors were expected to increase 10% from 2016-2026, which is faster than average compared to other job sectors. Primary reasons for employment growth include complex regulations, globalization and a growing overall economy. Earning a professional credential, such as the CMA, and having a master's degree might help improve your prospects.