A management accountant is an officer in the organisation entrusted with the installation, development, and running of an efficient management accounting system. He collects information on accounting and financial matters and separates relevant and irrelevant information. Then, he will communicate the relevant information to the various levels of management.
Also, he compares the actual performance with the planned one, computes variances, and reports the variances to management to take remedial measures. There is an excellent role of management accounting in decision making.
Major Functions of Management Accountant
The functions of a management accountant are as follows.
1. Installation of Management Accounting System
Management Accountants have to assume overall responsibility for installing, developing, and functioning an efficient management accountant system in the organisation. It is the main functions of management accountant.
2. Collection of Information
The management account has to collect the necessary information to help the decision-making at various levels of management. The information is collected from internal as well as external sources. Internal sources comprise financial records and cost records. External sources of management accounting information include competitors’ financial statements, market surveys, and business magazines.
3. Evaluation of Information
Evaluation means assessing the relevance of information and its utility to management. It separates relevant and irrelevant information. Only relevant information is reported to the management, and the irrelevant information is ignored. It is one of the main functions of management accountant.
4. Reporting of Information
Management accountants should report the information to various management levels in a manner most suitable for decision-making. A management accountant should prepare reports that fulfill the information needs of different management and management accounting levels.
5. Evaluate the Policies and Objectives
It is necessary to perform the functions of management accountant. It helps to analyse the policies, objectives, and procedures of the organisation so that the resources of the organisation are adequately put to use.
6. Protection of Assets
It is the functions of management accountant to ensure the fiscal protection of the assets of the business through an internal check, internal audit, and proper insurance coverage.
7. Tax Administration
A management accountant may be entrusted with the tax administration task, including tax planning, computation of tax liability, preparation of tax returns, and submission thereof.
8. Evaluation of External Skills
It should recognise the changes in these factors, assess their effect on the organisation, and send a report to the management. This report is related to management accounting, so they may take necessary action. It is one of the essential functions of management accountant to evaluate external skills.
Top 3 Qualities of Management Accountant
The essential qualities of successful management accountant are:
1. Direct Contact with the Top Management
These are the main qualities of management accountant. He should develop direct contact with the top-level management so that the cost control reports and the most valuable data are communicated to them appropriately.
2. Freedom from Routine Work
It is the principal officer in charge of accounts. He should have the essential qualities of management accountant. He should be ready to perform any additional duties that the top-level management may assign to him from time to time.
3. Personal Qualities
He possesses the following qualities of management accountant.
- He should possess complete knowledge of financial accounting, cost accounting, and management accounting.
- He should also have sufficient knowledge of economics, statistics, law, psychology, etc.
- keep himself aware of the latest technology affecting the enterprise.
- Must have knowledge of theory as well as the practice of management principles.
- He should have the capacity to think and confer with top management about the policies and programs of business.
- Above all, he must have leadership qualities.