Accountants play their part in every business. In fact, this catch-all category includes a wide variety of subsections. The experience of accountants, as well as the qualifications that they have achieved, make a difference. Certified management accountants, casually referred to as CMAs, are more than just numbers people. They’ve got the skills and training to integrate management, decision-making and strategizing.
Ask your CMA to highlight areas of higher than necessary spending
One reason that CMAs are well compensated is that they spot issues with spending trends. This means businesses can reduce costs without compromising their operations.
Say you are paying for services, solutions and resources that are not being used, or are underutilized. A CMA will be able to drill down into the data, detect this, and identify areas where savings can be made.
For example, one common area where businesses overspend is on labor. Often, this problem can be fixed by using available resources more efficiently. By scheduling labor according to anticipated demand, you can ensure that you have the right people working at the right times.
Providing projections and looking out for anomalies
Another key aspect of what a CMA offers is forward-thinking analytical insight. They can deliver accurate forecasts about things like spending and growth.
A standard accountant will be able to wrangle past financial records. Meanwhile, a CMA will use these as a jumping-off point to give you a roadmap forwards.
The added benefit of this is that once you’ve got anticipated performance metrics in place, you can tell when you need to deviate. This lets you go in the right direction based on hard stats, not guesswork.
CMAs produce variance reports which single out unexpected differences between projected and actual KPIs. From this they extrapolate actionable advice based on what the data tells them.
Sometimes it can be good news, others bad, but in either case you won’t be left scratching your head when your budget is over-stretched, or under-spent.
Outlining a budget
We’ve touched on the budgetary role of a CMA already, but it’s worth exploring this a little deeper. Obviously, you don’t need to be a qualified accountant to put together a budget for your business. The point is that an accountant with management skills will be able to budget better.
Accuracy and precision are the aims. And if you don’t have someone with a strategic head on their shoulders, it’s bad news.
There’s no point eyeballing figures and making pie in the sky predictions about spending needs. You have to hit the nail on the head more often than you miss. Everything from cash flow and revenues to expenses will be encompassed by a budget put together by a CMA. This will serve as the framework for how you steer your operations for the next year or more.
Stewarding strategic decisions
Innovations are the lifeblood of businesses, and if you’ve got a new idea for a project that sounds potentially game-changing, a CMA’s involvement is vital.
Basically, they will be on hand to assess the viability of any major decision you need to make. They’ll look into the money side of the equation and determine if taking a particular path will lead to a profit. More importantly, they’ll predict how long it will take to become profitable.
These decisions can vary wildly. You might need their guidance with regards to whether you make changes to your supply chain. You might ask them to tell you when the time is right to cancel a product or service offering.
Another aspect of this is the need to decide whether a major investment in an asset that you’ll use in the long term is a good move.
For example, say your new project requires the procurement of an expensive piece of equipment. A CMA will analyze the ins and outs of this, making sure that it is a fiscally responsible step. They’ll give it the green light, or suggest an alternative route forward.
This isn’t just about keeping the business on an even keel from a financial perspective. It’s also about keeping shareholders and investors happy. Even things like employee turnover costs can be analyzed and strategized against by CMAs.
Understanding the end goals of CMA certification
It should now be apparent that CMAs can be the lynchpin of up and coming companies. It’s also worth looking at where people with this qualification can end up.
There are entry-level CMA positions available, and businesses may even hire two or more specialists in this field. If they have especially diverse and complex financial affairs to steer, this makes sense.
Those who have worked their way up the corporate ladder via their CMA certification can hope to become CFOs, COOs, or even full-blown CEOs. Other professions do feed into these positions as well, of course. But CMAs are prime candidates because of all the skills mentioned.
It is not only this ability to interpret what the numbers mean that makes CMAs valuable. It’s also their insights and decision-making which gives them the edge. Plus, they can explain the reasons to non-experts.
The bottom line
Accountancy skills are required for every business. From keeping up with tax obligations to getting payroll right, bookkeeping is crucial. There’s also much more to money management than this.
With a certified management accountant, you get in-depth understanding, along with the expertise to use data effectively. For developing strategies and making decisions that will save your company time and money, CMAs take the biscuit.
It might seem like CMAs are only suitable for larger firms. However, they can also be instrumental in shaping startups in their early stages. So don’t discount them out of hand if you are a small but ambitious business.
If you are thinking of becoming a CMA, it’s a career path that can lead right to the top. The journey there is well worth taking. All you need is a will to succeed, and a mind for making numbers dance to your tune.