A management accountant is a person who looks after a company’s financial accounts. They advise the businesses regarding financial planning and its implications on the business for making better business decisions to aid growth and profit. They are responsible for advising the top management on the following:
- Different sources of finance
- Risk minimization and management
- Budgeting and Budgetary Control
- Financial Planning
- Corporate Strategy etc.
Role and Responsibilities of a Management Accountant
A management accountant plays a very important role in an organization for achieving its objectives. Following are some roles and responsibilities that a management accountant performs in an organization:-
LONG TERM AND SHORT PLANNING – They play a significant role in forecasting future business and economic events for making future plans i.e. long term plans, budgets, corporate strategy, etc.
MAINTAINING OPTIMUM CAPITAL STRUCTURE – A Management accountant is responsible for making a decision about how to maintain an optimum balance between debt and equity. He has to go through all the necessary financial details regarding raising and sources of funds and makes the best decision for the organization.
MANAGEMENT PROCESS – A management accountant holds a strong position in an organization and he has authority over the accountants and other employees in his office. He guides the subordinates regarding various financial procedures and policies and helps solve financial problems for the business.
CONTROL – They analyze accounts and prepare various reports like standard cost, budgets, variance analysis and interpretation, cash flow analysis, and fund flow analysis, performance evaluation, etc. for control.
DECISION MAKING – They provide all the necessary information to top management in order to make short term decisions like optimum product mix, Make or buy decisions, pricing of a product, and long term decisions like capital budgeting, investment appraisal.
MONITOR SPENDING AND FINANCIAL CONTROL – They set spending targets by creating budgets, and then keep regular track of who is spending what. In this way, management gets the idea of monthly or quarterly spending in the organization.