Management accountants provide important financial information that facilitate strategic planning, help to formulate and review budgets of the organization and identify existing discrepancies in budgets. They also remove wastages, set cost of production and prices of products produced as well as support good corporate governance. The above roles and functions of management accountants are explained below.
First, management accountants facilitate strategic planning by providing information on costs and related activities in the organization. This is because they collect and analyze important information on all the activities that organizations engage in. The information may include all production, marketing and administrative costs. They also attempt to allocate costs and revenues to all activities in the organization. The management accountants record all the activities and associated cost. Therefore, they are able to develop indicators of business performance. In addition, they make comparison of various activities and develop benchmarks that form the basis of business monitoring and evaluation system for the business organization. The information they provide, help management teams to make various investment decision.
Secondly, management accountants formulate and review budgets of the business organization. Budgets are important in apportioning financial resources to various activities of the company. Financial resources are scarce and require detailed analysis and planning to ensure that all departments receive adequate amount of money to conduct their daily operations. Management accountants enable the organization to allocate money and other resources to productive areas of the company based on their detailed cost analysis. This ensures that the business spends money only on what is important and that all activities are fairly considered. The budgets include capital budgets, cash budgets and production budgets. Management accountants