Are you confused between other accounting courses and management accounts? In this article, Bhaskar Ranjan Das explains how Management Accounting has an edge over Financial Accounts and why you should choose it.
Das is a member of industry associations such as CII, NASSCOM and FICCI. He has also co-authored a white paper on asynchronous learning models published in Deloitte's Handbook of Learning. He has received the highest contribution award in IBM and the most innovative learning solution at Asia Pacific HRD Congress.
CIMA is Chartered Institute of Management Accountants. Management Accounting is about looking beyond numbers and spreadsheets to add real value to the success of a company. It combines accounting, finance and management with the business skills and techniques one needs, to add real value to any organisation.
Management accountants are qualified to work across businesses, not just in finance but also in advising managers on the financial implications of big decisions, formulating business strategy and monitoring risk - much more than just crunching numbers.
Role of Management Accountants
Management Accountants are the brains behind turning finance data into business strategies for the company. 'Financial Accounting' is about 'crunching numbers' to share with the management whereas, Management Accounting is more than that as it has a deeper breathe of knowledge about driving the success of businesses.
The key role and responsibility of Management Accountants includes making decisions that would create value to help other parts of the businesses. With such inter-departmental support and tremendous role in influencing management's decision making process Management Accounting is replacing the traditional accounting standards in the world vis-à-vis in India.
Differences between Financial Accounting and Management Accounting
i. Prepare reports, generally based on past performance, in line with reporting requirements.
ii. Produce the required financial information for use by other functions within the business, for example department managers.
i. Collate information such as revenue, cash flow and outstanding debts to produce timely trend reports and statistics to inform important day-to-day management and business decisions.
ii. Combine financial information with non-financial information data to paint a complete picture of the business. Then use this to drive business success.
Scope of Management Accounts
A.Challenge in Business Management
Today, the trend in business management is changing whereby the demand for Board of Directors, CEOs and top management are increasing with businesses around the world becoming more volatile.
These people and corporates are looking out to their Chief Financial Officers (CFOs), Finance Directors and finance team members to be more than just regular accountants. They want someone who can decipher finance data and advise them on the best strategy moving forward. Today, companies around the world are demanding more skilful accountants. Now, they are expected to contribute more towards finance as well as business strategies.
B. Advantage of Management Accounts
Over a period of time, Management Accountants are becoming the driver of the business in most companies as CEOs look upon them for advices in formulating business strategies.
Today, a way to run a business is not just about producing financial statements but more about the value from producing these financial statements. Management Accounting is replacing the traditional accounting standards in the world vis-à-vis in India.
You can look into more on CIMA at www.cimaglobal.com