What is Management Accounting?
The words "accountant" and "bookkeeper" seem to be similar, but they are not. In fact, the two professions are totally different. An accountant is someone who is in charge of interpreting and maintaining financial documents. Typically, accountants will also have earned some at least an associates degree in accounting, plus focus on tracking and recording financial transactions... sometimes called "bookkeeping", but not limited to that. Accountants must have good mathematical skills and experience in interpreting and documenting financial data.
A bookkeeper is someone whose job it is to maintain books, or maintain some type of record for a company. Typically bookkeepers are responsible for entering and updating information into ledgers... but some bookkeepers have administrative duties as well. A good example would be an office manager who would enter employee timecards into the computer system and ensure all timecards have been entered correctly. In today's small business, many accountants and bookkeepers are doing more tasks than just entering numbers into a ledger. They may be doing everything from tracking employee hours and sending out checks or invoices, to making sure all of your financial numbers are in order, preparing reports for investors, handling payroll, planning your budget, and more.
When considering what career you want to pursue, you should make sure to take a close look at the job description for accountants. There are different aspects of being an accountants that are required to have knowledge of... and they are not the same as your typical office jobs. For example, many accountants must create and maintain balance sheets, which are simply statements showing how the company's assets and liabilities are divided up among its various creditors. Balance sheets are very important to any business; therefore, an accountants must be skilled in preparation and documentation as well.
If you are thinking about getting into the field of accounting, you must understand that the responsibilities are not always the same for each accountant. Some will focus primarily on a day-to-day task such as entering numbers in a ledger, while others will focus primarily on collecting information from various businesses or corporations on a daily basis. The best accountants can juggle work like this with accuracy and precision, making it possible for them to do the tasks required of them with minimal stress and worry. An accountant may perform other tasks as well... and some of those are not as easy as entering numbers into a book. If the job involves complex calculations, an accountant may perform other tasks that require both computer knowledge and intuitive skill.
However, that does not mean an accountant cannot perform other tasks, even if they are not required to do so under the majority of circumstances. The majority of accountants are responsible for preparing financial statements to present to their clients and/or providing presentations to investors, other business owners and/or government officials. Financial data is the lifeblood of the business and should be handled with care and attention by someone who has experience with preparing financial statements. It is necessary for an accountant to know and understand the current financial data that affects the value and price of the company's stock. With this knowledge, an experienced accountant can prepare accurate financial statements that are accurate and up-to-date.
Many companies use management accountants to handle financial records and accounting information. Management accountants are responsible for maintaining all company records, preparing reports for investors, ensuring compliance with securities laws and filing any paperwork related to financial information with appropriate authorities. The responsibilities of these individuals vary greatly, but most include closely supervising employees, approving and implementing employee paychecks, conducting employee appraisals and handling any tax related issues. They are also responsible for managing information regarding the company's cash flow, assets, liabilities and finances. Some management accountants specialize in particular areas, while others are generalists and may handle any aspect of the accounting process.
While these individuals generally perform their duties in a single office, they may also work remotely from their home or from a remote location. Responsibilities related to accounting software, client billing and payroll can be fulfilled by these individuals, while general duties include developing financial statements, preparing reports for investors, analyzing data, communicating with clients and working with internal auditors. In some cases, an accountant may be called upon to collaborate or work closely with lawyers, accountants and other individuals with expertise in accounting matters. When this occurs, it is important for the individual to effectively communicate and work well with others in the field.
A good majority of large businesses have decided to outsource some of their accounting functions, such as providing bookkeeping services and providing management accounting services. The majority of companies will not only outsource some of their general accounting functions, but also will usually outsource specific areas of accounting such as inbound call accounting, supplier sourcing, accounting information management, government review services and other services. Outsourcing an area of accounting requires the accountant to have knowledge in that area. Some accountants may have training related to specific areas of accounting such as finance or accounting principles. Management accounting service providers are qualified to assess the needs of the business and develop specific plans to meet those needs.