Is Accounting Boring? What about Management Accounting?
Jan
20
Written by:
20 January 2011
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Many times I've heard that accountants are boring and only do the backend postmortem for the financials of a company - well I never have agreed with this.
Are we boring? ...Naah!
Accounting is as interesting and important as any other aspect of business. Let me discuss one of the most interesting parts that I like in accounting... Management Accounting.
So what is Management Accounting?
According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities".
Huff... no wonder people think accountants are boring!
In simple terms management accounting is concerned with the use of accounting information for managers to help them by providing clear and relevant input to make business decisions. Now please let’s not confuse it with financial accounting it differs in many ways including:
- Management accounting is designed to be used by the managers and not for shareholder, creditors and public regulators
- Management account reports are confidential and not published
- The report often includes some forward looking projections on the basis of the historical data, economic conditions, and knowledge of future business expectations
- MIS (Management Information Systems) are used quite often for producing management account reports. Manager feedback and requirements are kept as the top priority
So we're as involved in the business as any production department of a production firm, to make the right decisions at the right time as they produce the right products at the right time.
The Management Accounting Skill Set
Management accounting is a combination of accounting, finance and management with the leading edge techniques needed to drive successful businesses. Thus it requires skills in all accounting, finance and management and thus some of the common features needed are:
- Analysis - analyse information and using it to make business decisions.
- Strategy - formulate business strategy to create wealth and shareholder value.
- Risk - identify and manage risk
- Planning - apply accounting techniques to plan and budget.
- Communication - determine what information management needs and explain the numbers to non-financial managers in a way they can understand.
Now isn’t this some interesting stuff to get involved in?
If business has this sort of internal management account report service, can you see how it can be beneficial to managers making decisions?
I invite everyone to please share your thoughts.
Mukul Ranjan
The Accountants Circle
Visit our Financial Management Reporting System page to see our solution for preparing and presenting management account reports for SMEs
14 comment(s) so far...
Re: Is Accounting Boring? What about Management Accounting?
Really nice blog item, were not boring for sure, I'm looking in to setting up a blog dedicated to the lighter side of what we do as well as all the important stuff
By Staffords Accountants on
15 February 2011
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Re: Is Accounting Boring? What about Management Accounting?
I have been employed as a management accountant but upto late i have basically been doing financial accounting, reading your blog have given me more insight on what is expected of me and in a huge way, made it look interesting.. I am really looking forward to working as a management accountant in this financial year..Cheers
By Daudi on
27 February 2011
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Re: Is Accounting Boring? What about Management Accounting?
Hey.
First of all, thanks for these great article. Good content!
I am working in a Chartered Accountants St Albans firm as an Accountant. Being an accountant means that you need to face challenges on every new day. People think that an accountant only calculates the salary of the employees s. But there is nothing like that. Management Accounting is a very interesting job profile. I would like to know more about it.
Tkcr
By Jennifer on
28 February 2011
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Re: Is Accounting Boring? What about Management Accounting?
I believe that the role of the Accountant should start with Strategic Planning, including assisting Departmental Heads create thier Operational Plans and then leading to the Budget.
Management Reporting should be fast, relevant and accurate so that the business can react to latest decisions and events as soon as possible.
I have long worked in an environment of 1st day of the month Flash Reporting where Accounts staff combine known facts and experience to publish January's results on the 1st February. This discipline tightens up the entire Accounts Department and places the focus on the present and not the past.
To find out more visit www.ImpactFinanceDirector.co.uk
Regards
Alan D. Baker
By Alan D. Baker on
01 March 2011
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Re: Is Accounting Boring? What about Management Accounting?
Nice post. There is a lot of qualified accountants who still struggle with debits and credits.
curt
By Nike MS78 on
24 March 2011
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Re: Is Accounting Boring? What about Management Accounting?
How could accountancy ever be boring!
Nice blog post anyhow
Accountants In Lancaster
By Rick Kumar on
23 May 2011
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Re: Is Accounting Boring? What about Management Accounting?
I thing it was'nt because, it is very easy, funny and interesting subject. to working accounting sector anybody can be very happy, by the way its totally my opinion.
By imtu on
22 June 2011
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Re: Is Accounting Boring? What about Management Accounting?
The software itself can be quite expense if the client only wants to maintain the basic records, possibly only their invoicing records and trade suppliers.
NLP training online
By Andrew123 on
05 August 2011
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Re: Is Accounting Boring? What about Management Accounting?
Indeed this is a very interesting article, is actually an eye opener to those who think so.
Accounting field is very much interesting and of people with intergrity. Management Accounting is more interesting as is more of a strategic field and flexibility is highly excercised.
By Bongani on
13 August 2011
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Re: Is Accounting Boring? What about Management Accounting?
This is good site to spent time on .I just stumbled upon your informative blog and wanted to say that I have really enjoyed reading your very well written blog posts. I will be your frequent visitor, that's for sure.
I am working with a firm of Accountants in London and this really worth reading for me Many things i never knew before thanks for sharing this valuable stuff :) . I will be your frequent visitor, that's for sure.
By jeddyford on
19 August 2011
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Re: Is Accounting Boring? What about Management Accounting?
The quote I heard was that acturists are really accountants that find accountacy just too exciting.
I have been designing management information systems & business intelligence systems for years so I am just about to start a 9month course at the OU on management accounts, which I hope will be a useful combination of skills
By Trebor on
26 September 2011
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Accountant Mississauga
Really its very good post. knowledge sharing is the optimum result of knowledge gaining...
By mike on
04 November 2011
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Accountant Mississauga
Nice posting, Very Useful information , this is both good reading for, have quite a few good key points,
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By mike on
04 November 2011
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Re: Is Accounting Boring? What about Management Accounting?
I'm a software developer and everyone thinks we're boring so you're certainly not alone.
I think where we appear most boring though is whilst attempting to prove how interesting our subject matter is. For the truth is, people don't care and would rather discuss the results of the latest TV reality or talent show.
Those people who do not have challenging or interesting jobs have no interest in those who do.
The image of the accountant though has suffered considerably over the years, particularly from those masters of comedy, Monty Python: http://thebozzman.wordpress.com/2011/11/02/accountancy-vs-lion-taming/
By TheBozzMan on
12 November 2011
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