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Management accounting combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.
In addition to strong accounting fundamentals, CIMA teaches strategic business and management skills:
- Analysis – understanding the story behind the numbers and using it to make business decisions
- Strategy – using the insight from analysis to help formulate business strategy to create wealth and shareholder value.
- Risk – applying analytical skills to look at end-to-end business processes to identify and manage risk.
- Planning – using accounting techniques to plan and budget.
- Communication – knowing what information management needs and explaining the numbers to non-financial managers.
You can trust CIMA members
CIMA members and students are required to comply with the CIMA code of ethics and to adopt the fundamental principles to their working lives. CIMA members are at the heart of business as its conscience, adding judgment, independence and objectivity to their professional qualification.
Every year, CIMA audits its members to ensure they uphold these ethics and will take action if members have been less than true to them.
For most clients the institute a qualified accountant is a member of isn’t a key factor, especially if they are only looking to have their accounts prepared and tax return done. Some simply look for a “Chartered” accountant, which most qualified accountants in practice are if they belong to one of the main professional bodies.
However there are some key differences between the skills and experience of a traditional “high street” accountant and a CIMA Member in Practice. Here are a few:
- A CIMA accountant will tend to look at the business from the inside, rather than just the numbers that make up statutory accounts.
- Their professional training placed a lot of emphasis on providing businesses with meaningful data to support the day to day running of the business, so called management accounts.
- They are likely to have been exposed to a variety of different software systems, and may think more in terms of business processes.
- They are less likely to have worked on statutory audits (which are usually only needed for companies that meet 2 out of the following requirements: turnover of over £6.5 million; assets of more than £3.26 million; has more than 50 employees) so for SME’s that tends not to be an issue.
- They will generally be less obsessed with timesheets and billable hours!
That’s not to say that hiring an accountant who has just emerged from a 30 year career in the Management Accounting department at a local shoe factory is going to be the best thing for a small business, but CIMA have thought about that. Before a CIMA member can get the Practising Certificate they need in order to provide services to the public they need to meet the institute’s skills and experience requirements.
Back to the beginning, many individuals and companies hire an accountant without checking if they are qualified at all. Unlike the financial services industry, accountancy is lightly regulated and anyone can set up shop. Indeed, there are many “qualified by experience” accountants out there giving a good service to their clients. However should things go wrong ……. we’ll look at “when accountants go bad” in a future blog.
As a nation we seem obsessed with comparison websites and we readily switch insurers to save £50-100 on our car or home insurance. So why don’t businesses market test their accountant more often? Is it because they are happy enough with the basic service and see little differentiation between local firms, or do they think its a lot of hassle to change even if they are open to the idea? I often meet business owners who aren’t entirely happy with their accountant but can’t bring themselves to do much about it, so when I get the chance I explain how easy it is to change, at the right time.
Service and other benefits aside, businesses can often save significant amounts by shopping around. This particularly applies the more services you require. Take a look at your accountancy and bookkeeping costs over the last year. How many items were billed separately, or in addition to the core fee you had agreed? Was your personal tax on top of the fee for the accounts?
In a future blog I’ll look at how to go about changing accountants and the differences a CIMA accountant can bring.
Meanwhile if you can see some benefit in changing your accountant, go (and) compare!
A Google search will produce a list of hundreds to choose from, so how will know which one is right for you and your business?
According to SBA.Gov
An accountant can save you time and clear up much of the confusion you experience when it comes to managing your finances and taxes, but a trusted accountant can provide other benefits, too.
Act as a Trusted Advisor – More than just a tax preparer, an accountant can become a trusted advisor to your small business, helping you manage cash flow, plan for growth, assess risk, and keep your books in order.
Help Balance Business and Personal Needs – Many small businesses, particularly sole proprietors and startups, find that their business and personal finances are closely linked. A good accountant can help you make sound judgments beneficial to both.
Here are my top tips:
- Decide what services you need for example you might only need your accountant to prepare the year end accounts and tax returns and you might do the book keeping and payroll yourself? Or you might want help with Business Plans and raising finance?
- Ask about your accountants qualifications, CIMA Members in Practice are highly qualified, monitored by their Accounting Institute and carry appropriate levels of Professional Indemnity Insurance.
- Ask about their experience and knowledge of your type of business and industry sector, do they have references and testimonials?
- What if your accountant is sick or unable to do your work? do they have a continuity agreement in place with another accountant (all CIMA MiPs have these agreements)
- Ask about the fees and service levels, your accountant should provide you with a letter of engagement setting out what their fees are and the services they will provide.