The Certified Management Accountant certification (CMA) is sought after by employers and growing increasingly common for accountants to earn. So, what does a CMA do? To help you understand and determine if this is the right certification for you, we're providing some insights that can inform your decision.
Table of contents
- What is a Certified Management Accountant?
- Understanding management and cost accounting
- CMA career paths
- What happens at the top of a CMA's career?
- The earning potential of a CMA
- How to become a CMA
What is a Certified Management Accountant?
The Institute of Management Accountants awards the Certified Management Accountant certification to individuals who demonstrate advanced knowledge and expertise in areas of management accounting. They specifically focus on areas related to financial planning, financial analysis, analytics, and financial risk mitigation. While accountants often have to answer "what" related to finances— like what is the organization's cash flow, what is the cost of labor, etc., CMAs are expected to explain the "why" behind the numbers, then use that information to look at the future.
The CMA certification is a global credential, making it a popular option for both accountants in the United States and throughout the world.
Take the next step: Learn more about what a CMA is.
Management and Cost Accounting
When you ask what do CMAs do, the role is mainly related to management and cost accounting, and most people who earn this certification have a background in these areas. Let's look more closely at these areas of accounting to provide more context.
What is a management accountant?
Management accounting, or managerial accounting, helps organizations optimize their financial performance and achieve their strategic goals. The accurate and timely financial information management accountants provide to internal managers and executives is future-oriented with insights into projections and planning to help inform decisions and build financial strategy. Key tasks of a management accountant include:
- Budgeting and Forecasting: Preparing detailed budgets and forecasts to help plan and control future operations
- Cost Analysis: Analyzing costs of production, operations, and projects to identify areas for cost savings and efficiency improvements
- Performance Measurement: Developing and using performance metrics to assess the efficiency and effectiveness of various business activities
- Financial Reporting: Creating internal financial reports that provide insights into the financial health of the organization
- Variance Analysis: Comparing actual financial performance against budgets and forecasts to identify and explain variances
- Decision Support: Providing financial data and analysis to support strategic and operational decision-making
- Risk Management: Identifying and managing financial risks to ensure the stability and profitability of the organization
Take the next step: Learn more about management accounting
What is a cost accountant
Cost accounting is branch of management accounting with a narrower focus on understanding a company's total cost of production. Cost accountants assess both the variable costs of production as well as the fixed costs of running a business, such as a lease expense to help internal stakeholders, like managers and executives, understand the costs of running a business and identify areas of opportunity related to reducing costs.
Unlike management accounting which uses a variety of tools and techniques, like financial analysis, budgeting, and performance metrics, cost accounting uses more specific techniques, like standard costing and activity-based costing to perform the following tasks:
- Cost Classification: Categorizing costs into direct and indirect costs, fixed and variable costs, etc
- Cost Allocation: Assigning costs to different departments, products, or projects
- Cost Analysis: Analyzing cost behavior and how costs change with different levels of production or activity
- Inventory Valuation: Determining the cost of inventory, including raw materials, work-in-progress, and finished goods
- Standard Costing: Establishing standard costs for products and services and comparing them to actual costs to identify variances
- Activity-Based Costing (ABC): Allocating overhead costs based on activities that drive costs, rather than just on volume measures
- Cost Control: Monitoring and controlling costs to ensure they stay within budget
- Cost Reporting: Preparing reports that provide detailed information on costs for management decision-making
Take the next step: Learn more about cost accounting
What does a CMA do as a career path?
While most CMAs come from a managerial or cost accounting background, what does a CMA do after they get their certification? The most common career paths for the newly certified include:
- Financial reporting analyst: CMAs analyze financial data to help companies make informed business decisions by preparing reports, forecasts, and budgets that provide insights into financial performance.
- Financial planning & analysis (FP&A): This role focuses on analyzing existing data to inform financial planning, budgeting, and forecasting to support business strategy.
- Cost accountant: As we mentioned above, CMAs help organizations manage and recude costs by preparing reports, analyzing costs, and developing cost control strategies.
- Consulting: CMAs use their experience and knowledge to advise businesses on improving efficiency, reducing costs, and optimizing financial performance. Their insights lead to strategic recommendations and how to implement best practices.
- Corporate accountant: CMAs often work as corporate accountants, using their skills in strategy, planning, and analysis to support the financial health of the organization.
What does a CMA do at the top of their career?
Having a CMA certification also opens the door to more senior leadership and executive roles. In addition to careers like Senior Financial Analyst, or Senior Cost Accountant, you may have a spot in the C-suite waiting for you as a Certified Management Accountant.
Controller
A controller is a senior-level executive who ensures the financial integrity and stability of an organization and are responsible for overseeing the accounting operations of a company. In addition to overseeing accounting staff and working closely with other departments to ensure accurate and timely financial reporting, controllers also manage the process of preparing financial statements, ensure compliance, and maintain internal controls. They also play a key role in budgeting, financial planning, and analysis to support decision making and financial strategy.
Take the next step: Learn more about becoming a controller
Chief financial officer
A Chief Financial Officer (CFO) is the top executive responsible for managing the financial actions of a company, including overseeing the financial planning, risk management, record-keeping, and financial reporting. The CFO works closely with the CEO and other executives to drive business growth and ensure financial stability and strives to ensure the company's financial health supports its overall strategic goals.
With their knowledge of strategy and management, CMAs have greater opportunities to rise to these executive roles.
Take the next step: Learn more about becoming a CFO
Certified Management Accountant earning potential
According to the IMA1, CMAs earn 21 percent more than accountants in similar roles without a certification, though in some regions outside the United States, CMAs earn up to 43% more. Additional details related to CMA salary include:
- The average base salary among IMA members in the United States is around $133,000 annually.
- Nearly one-third of IMA members in the United States work remotely either all or most of the time.
- IMA members with both their CMA certification and CPA license earn more than accountants in similar roles with one or no designations.
Take the next step: CPA vs CMA
How to become a Certified Management Accountant
Now that you have an answer to the question, "What do CMAs do?" you probably want to know how to earn your certification! To become a CMA, follow these steps:
- Have an active membership with the IMA and pay the entrance fee for the CMA Exam.
- Hold a bachelor's degree or higher from an accredited university or college
- Pass both Part 1 and Part 2 of the CMA Exam
- Gain two years of relevant professional experience in management accounting or financial management
You can work on gaining experience while studying for the CMA Exam or finishing up your education, so the path to certification isn't so long as it might seem. Most people study for and pass both parts of the exam in 12 to 18 months.
Take the next step: Learn more about the CMA Exam
Download our free guide to becoming a Certified Management Accountant
If you would like to learn more about becoming a Certified Management Accountant, Becker can help! Download our free guide, Stand Out in Finance and Accounting, that outlines everything you need to know about the CMA Exam, including topics and study tips, and gain deeper understanding of the experience and education requirements so you know exactly what you need before you get started.
Stand out in finance and accounting as a Certified Management Accountant!
In this FREE ebook, you'll learn more about the CMA certification, how to earn it, what kind of opportunities can open up, and whether it's right for you!
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