Accountants play a pivotal role in improving their organization’s financial and operational performance by helping key decision-makers understand the nuances of ongoing business activities. Using both quantitative and qualitative financial information, accountants create detailed reports and recommendations that guide investments, capital management strategies and organizational goals.
As accountants advance their careers, they often look for new opportunities to leverage their knowledge, skills and experience to greater effect. While being a public accountant might be appealing for some, there are plenty of other careers available to pursue, including in managerial accounting. But what is managerial accounting, and how can aspiring professionals prepare themselves to take on this role?
Managerial Accounting: Definition
Managerial accounting is the process of “identification, measurement, analysis, and interpretation of accounting information” that helps business leaders make sound financial decisions and efficiently manage their daily operations, according to the Corporate Finance Institute. Unlike other branches of accounting, this role is focused on internal data gathering and reporting, meaning professionals do not typically work with or advise external clients. Instead, managerial accountants focus on understanding their company’s cash flows, financial transactions, operating costs and internal rate of return. Once collected and analyzed, this accounting information is translated into reports and presentations that inform budgeting decisions and future investments.
Since managerial accountants generally aren’t responsible for external reporting (though they may be called upon to do it at times), they can make use of analysis and reporting techniques that fall outside traditional accounting standards, such as the generally accepted accounting principles (GAAP). This allows them to tailor their findings in ways that meet different end-user needs without worrying about regulatory compliance.
For example, a managerial accountant may be asked to chart expenditures in a graph format by one department, and to translate this financial information into percentages by another. Not only does this flexibility enable more granular and actionable financial reporting, it can also help optimize product costing, budgeting and forecasting activities.
Managerial Accountant Job Description
Managerial accountants can work for public or private companies, as well as for government organizations and not-for-profits. While the specific job description of a managerial accountant will vary from one organization to the next, their duties and responsibilities often encompass:
Managerial Accounting Examples
Managerial accounting can take different forms, depending on organizational need. Some of the primary examples of managerial accounting include:
Key Managerial Accounting Skills and Techniques
Managerial accountants use a wide variety of technical skills and analysis techniques to create accurate financial statements, forecast future expenses and identify cost-saving opportunities. Using key performance indicators as benchmarks, they conduct in-depth financial investigations into every facet of their company’s operations, from the costs of goods sold to its net present value.
Since every business has different operational needs and financial constraints, no two managerial accounting positions will be completely identical. For example, professionals working for a manufacturing firm may focus on supply chain costs and production expenses, while those in the retail industry are more concerned with inventory valuation. Regardless of their employer, managerial accountants rely on similar skills and techniques, including:
Managerial Accountant Salary
Because of their specialized skill set and the value they provide to their organizations, managerial accountants often earn competitive salaries. The median annual salary for managerial accountants was approximately $73,500 as of June 2022, according to data from Payscale.
Several factors can influence an individual’s actual salary:
Payscale reports that salaries for managerial accounting roles vary widely based on these factors, with a salary range between $46,000 and $105,000 as of June 2022. Aspiring managerial accountants may be able to boost their earnings — and help themselves stand out in the job market — by earning an advanced degree.
Advance Your Accounting Career with a MAcc from the University of Nevada, Reno
If you’re interested in pursuing a managerial accounting career, the online Master of Accountancy program at the University of Nevada, Reno can help you assemble the knowledge, skills and experience you need to excel. The MAcc degree program is designed to both reinforce accounting fundamentals and educate students about complex financial reporting techniques, including cost accounting, margin analysis and capital budgeting.
To learn more, explore the MAcc degree page or contact an enrollment adviser today.
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