6 things you might not know about management accountants
On May 6, we at the Institute of Management Accountants celebrate International Management Accounting Day to show appreciation for the accountants and financial professionals who do their part to enable ethically sound, value-driven organizations benefitting the public interest.
Management accountants – or accountants who primarily work in business, industry and government – are vital to the financial health of organizations. They make critical decisions to create value, safeguard a company’s assets, and plan for business sustainability. From CFOs to controllers, budget analysts to accounting managers, they help drive an organization’s strategy and value in the face of intense competition, uncertain global economic conditions, and disruptive technologies.
According to the U.S. Bureau of Labor Statistics, there are approximately 1.3 million accountants in the U.S. Of these, the IMA estimates that there about 975,000 management accountants today, with many more around the world. Despite its ubiquity, the profession is often misunderstood and confused with other subsets of accounting.
Many assume that all accountants do exclusively tax and audit and work in a public accounting firms like the Big Four. But the truth is, the majority of accountants – about 75 percent – either work in corporate businesses as management accountants or in academia.
So, on International Management Accounting Day, we want to set the record straight on a few things:
1. Did you know management accountants make more? Management accountants not only handle money well, they make more of it! According to the IMA’s Global Salary Survey, the average annual total compensation for a management accountants is $97,475. In the Americas, the average is even higher, at $136,287.
2. Did you know management accounting has a long history? Management accounting’s roots began in the Industrial Revolution in the early 1800s. During this time, many companies were controlled by a small group of owners who borrowed based on personal relationships or their own assets. Since there were no external shareholders, there was no need for financial reporting. The owners of large textile and steel manufacturing companies did, though, need sophisticated systems to monitor their own assets and capital and support decision-making – thus the birth of the management accounting profession.
3. Did you know management accountants are happy? The IMA salary survey found that management accountants liked their jobs. Among the factors most favored by the respondents, relationships with colleagues, work-life balance, and job security are the top ranked. Management accountants also frequently report enjoying the ability to apply their skills to solve problems and make a tangible impact on business strategy.
4. Did you know the profession is growing like wild fire? Every day 10,000 people in the U.S. are reaching retirement age, and this trend will continue for the next 13 years. As the Baby Boomers move out of the workforce, there will be a huge demand for qualified talent to fill their places. The job creation isn’t just coming from Boomers leaving the workforce. The demand for management accountants is expected to keep pace with the growth of the economy – as the economy expands, so too does the need for accountants. In fact, the U.S. Bureau of Labor Statistics estimates that employment of accountants and auditors in the U.S. is expected to grow by 11 percent, or nearly 143,000 new jobs, for the decade 2014-2022.
5. Did you know they want (skilled) help? Baby Boomers leaving the workforce creates opportunities as jobs open up, but it also creates challenges. As Boomers leave the workforce, they take with them years of institutional knowledge that companies are having trouble replacing. A recent survey by the IMA and APQC found that accounting and finance executives — primarily at the manager/director level — report significant challenges in hiring qualified employees. As a result, their entry-level management accounting and finance colleagues have substantial deficiencies in many competency areas.
6. Did you know they rock? Robert Plant of Led Zeppelin, Mick Jagger of the Rolling Stones, and Janet Jackson all studied accounting in college. While not all of them graduated, we can clearly infer that those who study accounting are the coolest of cool.
So on International Management Accounting Day, take some time to show appreciation to the management accountant in your life. Send a thank you or share your dessert. Better yet, share this article to make sure everyone knows who management accountants are and how much they contribute to society.