A-Z of MANAGEMENT ACCOUNTING FROM CIMA!

Whether you have just matriculated or just finished your Diploma, there is a great accounting qualification opportunity that will change your life.  Whether you plan to be a business leader or occupy high-level business levels management accounting is a qualification that can help you get there. According to the IMAs (2021), a Global salary survey 85% of accountants agree that CIMA strengthened their ability to move across all areas of business. Most Management Accountants get jobs in leadership and strategic positions. The IMAs global salary survey (2021) confirms that Cima accredited management accountants get a median total compensation of 58% higher than people without a CIMA accreditation. 

What is Management Accounting? 

Management Accounting is also known as Managerial Accounting or Corporate Accounting, it includes all the tasks pertaining to financial and accounting that are required to operate the business. 

Management Accountants work within companies and organizations to direct internal financial processes, monitor cost, sales, spending, and budgeting, conduct audits, identify past trends and predict future needs, and assist company leaders with financial decisions. 

Management accountants are often confused with Financial accountants; while both provide valuable service to an organization, there are key differences between the two roles. Managerial accounting primarily involves completing tasks and producing reports that inform company leadership about financial decisions related to general company operations. Financial accounting’s central faces are informing external groups – such as banks, boards of directors, stockholders, and tax agencies- about the company’s financial status. 

Someone entering the managerial accounting field should be skilled in risk management, budget planning, strategic planning, and financial data analysis. These accountants also have a detailed knowledge of generally accepted accounting principles (GAAP), strong communication skills, and a forward-thinking approach to their work.  

The main difference between Management Accounting and Traditional Accounting (CIMA,2021) 

Why is Management Accounting important?  

Management brings a higher-level value to the business as they have a holistic multifaceted role to play in which every sector of the company they work for. This is because they are business leaders, innovation advisors, make data-backed decisions, and are forecasters.

They are business leaders. 

The CIMA Management Accounting syllabus equips its students with tools to understand how organizations work. This includes how to derive a business model, understanding the strategic context as well as the competitive positioning of the organization. In Siri Lanka, Hemas Holdings CEO Kasturi Chellaraja Wilson, who is a CGMA graduate is one of the examples of doors Management accounting can open. A role model to many she is one of the few women to occupy such a powerful male-dominated position.

They are innovators.  

CIMA Management accountants are critical thinkers that are trained to constantly adapt to the changes as the world changes. Management accountants are expected to think out of the box to solve the existing problem.  

They make data-backed decisions.  

One of the main requirements towards becoming a great Management Accountant is proficiency in mathematics. Management Accountants can use both quantitative and qualitative data to make a holistic informed decision.  

They are forecasters. 

 Unlike Financial Accountants that focus on the past, Management Accountants focus mostly on the future. Management Accountants can gather and analyze statistics to spot the trends and make strategic informed decisions. These decisions will aim to improve internal efficiencies as well as tackling marketing expansion. 

What are the benefits of studying and becoming a Management Accountant? 

There are many advantages to becoming a Management Accountant.  Below are a few mentionable: 

Unlock the global job market. 

CIMA is recognized all over the world, in every industry. Many companies trust CIMA and realize the value of having a management accountant in their company. Many companies are upskilling their employees to get this qualification. 

 Get a qualification that is in demand in the fourth industrial revolution. 

The fourth Industrial revolution compounded with the pandemic has declined the economy and increased the use of technology. This as a result has shifted business needs and threatened many professions. With the rollout of efficient bookkeeping software such as Xero which is cheaper, many technical accountants will be out of jobs soon. However, at the same time businesses are valuing the skillset of management accounting as they help the business strategy to grow. Minister of Home Affairs, Dr. Aaron Motsoaledi listed Management Accounting as one of the scarce critical skills needed in 2021.

In South, Africa CIMA is equivalent to SAICA and SAIBA. 

In South Africa CIMA, SAIBA and SAICA entered into MOU to allow students from each body easier access to the other body. CIMA offers exemptions to both SAICA and SAIBA members depending on their holistic review of the entry requirements and competency frameworks. As a result, if you study CIMA and feel that you would like to also be a Charted Accountant (CA). There is no problem, you just have to write one strategic-case-study exam to also become a CGMA. A similar approach is applicable to SAIBA members.

You have many different study routes or options. 

Unlike Charted accounting, you do not have to go to university and be subjected to traditional, rigid expensive studying experience. Choose to study from the comfort of your home through many different accredited CIMA offering institutions.  

CIMA offers a great foundation for aspiring entrepreneurs. 

Management accounting will equip you to be a business-aware holistic strategic thinker. Management accountants are groomed to be business leaders with sharp business acumen. These fundamental skills are a great foundation for aspiring entrepreneurs.  

Is Management Accounting in Demand in South Africa? 

Despite having a declining economy and loss of jobs in many sectors, now is the time to become a Management Accountant. IMA’s CEO foresees growth in accounting automation as well as demand for strategic management accounting professionals. Minister of Home Affairs, Dr. Aaron Motsoaledi announced management accounting as one of the critical skills needed in 2021 (Comins, 2021). 

What are the entry requirements to study Management accounting? 

CIMA has low entry requirements. The only entry requirement for CIMA is that you are Maths and English proficient.  Whether you are a matriculant or have a qualification in accounting you can study CIMA. If you have a qualification in Accounting, you can fast-track entry-routes by applying for exemption free of charge. The exams and levels you are exempted from depending on the degree or qualification you hold. The exemption is subject to CIMA discretion. To start your Management accounting journey, you can register on CIMA'S website as a student.

How many years does it take to study Management Accounting?  

The CIMA professional qualification can take 3 – 6 years to finish. There are 12 exams to be completed which include nine objective tests and 3 case study exams. According to CIMA, students usually do 12 professional exams in 4 years. 

CIMA Qualification and length of each course 

CIMA has different levels of qualifications, each level has its own time limit in which you need to complete it. Starting from entry-level to the strategic level 

• CIMA Certificate in Business Accounting (entry-level) 
• CIMA Professional Qualification (Operational level) 
• CIMA Professional Qualification (Management level) 
• CIMA Professional Qualification (Strategic level) 

Therefore, completing your CIMA certificate does not mean that you are fully qualified as a CGMA member, there is still a long way to go. You need to finish and pass all CIMA’s Professional Qualifications objective exams and pass the case study exams. 

Course overview 

CIMA Certificate in Business Accounting  

An entry–level qualification created to get knowledge on the business and finance industry. Made to help you build a good understanding of business basics, management, and the basics of management accounting. After you have completed and passed all the tests you then get a CIMA Certificate in Business Accounting (NQF level 5), Qualification letters – CIMA Cert BA. Induration of 12 – 18 months 

The CIMA Professional Qualification is divided into three levels. 

Operational level 

The first level of business strategy and management skills helps you to learn how to use strategy as a tool also how to report on it, the Qualification get is CIMA Diploma in Management Accounting (NQF level 6), Qualification letters – CIMA Dip MA, you can do it between 1 – 2 years.  

Management level 

The second level of the CIMA Professional Qualifications plays a crucial role in helping you on how strategy is created and used in the short and medium-term. The qualification you awarded is called CIMA Advanced in Management Accounting (NQF level 6), Qualification letters – CIMA Adv Dip MA, and it takes 1 – 2 years to finish. 

Strategic level 

This is the last stage to complete that takes 1 – 2 years, where you fully qualified as a CGMA member (you apply for CIMA membership after you have completed your strategic level case study exams). It focuses on strategy over a long–term period. The qualification you get is – CIMA Diploma in Management Accounting (NQF level 7), and Qualification letters – CGMA. 

The diagram below shows the CIMA qualification framework that includes each level and the modules to be done in the 2021 Syllabus.

Where can I study Management Accounting? 

The Charted Institute of Management Accounting understands the demand and critical urgent need for management accountants in the current context. That is why CIMA has accredited both universities and colleges to facilitate management accounting education. Many Universities in South Africa re-accredited to offer Management Accounting. If you would like to study and become a Management Accountant or A Charted Accountant but did not get accepted in University, you still have a chance to get the same qualification.  

Study at The Graduate Institute of South Africa (GISA) 

One of the colleges that have been accredited to offer CIMA is the Graduate Institute of South Africa. The Graduate Institute of South Africa is a SAQA accredited tertiary education institution. It was founded in 2013 and has been in operation since. The Graduate Institute Of South Africa aims to empower South African youth through high-quality affordable innovative learning opportunities. GISA sees the competitive advantage of equipping South African youth with CIMA as it is an in-demand predominating qualification.  

What is the study structure? 

GISA offers flexible study options for its students. The students can either choose to have online classes or part-time face-to-face classes. These classes are interactive. Unlike the Universities, GISA makes sure that classes have a maximum of 30 students to ensure that students get better attention and guidance. GISA does quality assurance every 3 months to ensure the facilitators and the CIMA content is taught at a satisfactory quality. This is to ensure high pass rates. Unlike universities that bombard you with several courses at the same time, at GISA the facilities teach one course at a time. This is to lessen study strain on a student to ensure optimum performance.  

GISA understands that students are learning at different paces. To cater to that difference, CIMA is delivered on a write-in-demand basis. If you are a fast learner and finish the course within a short period of time and feel that you are ready to write an exam you can. You do not have to wait for the end-of-year exams. This allows students to pace themselves to reach their goals.  

Tuition fees and registration? 

GISA offers affordable tuition fees for this valuable qualification. Depending on the study option, you choose you will pay accordingly. Please note that the below-listed fees do not have to be paid once off. GISA gives you an opportunity to pay in monthly installments for each course. Every course takes 3 months to pay off.  

If you would like to start your career in Management Accounting click here.

What job can I get as a Management Accountant? 

Management accountants are flexible and can find employment opportunities in various work industries and settings.  Management accountants can work in private companies, public companies, government, and non-profit organizations. Their job profiles and responsibilities will also differ based on the business type and needs. The following is a list of five but not all jobs you can get as a management accountant.  

Corporate Treasurer

Many accountants aspire to be corporate treasurers. Treasurers are responsible for all corporate financial activities, including managing cash, issuing debt, interest rate risk, overseeing pension investment, managing liquidity, and managing capital structures. The corporate treasurer deals with the board of directors and shareholders. In South Africa, a corporate treasurer earns an average of R1,812,603 (Rands)/yr and this salary is expected to grow by 27% by 2026. 

Chief Financial Officer (CFO) 

The CFO is a senior executive who manages all day-to-day corporate finance functions. The CFO has to ensure that the company grows by taking decisions that minimize financial risks. He or she is required to also make sure that financial statements and books are to par. In South Africa, a CFO earns an average of R2,276,776 (Rands)/yr and this salary is expected to grow by 27% by 2026. 

Financial analyst  

The financial analyst usually works in banks, insurance companies, and other businesses. Their main responsibility is to prepare forecasts and projections, prepare budgets, monitor task performance, keep track of actual costs and analyze different variances. In South Africa, a financial analyst earns an average of R390,692 (Rands)/yr. 

Accounting manager 

Accounting managers prepare budget and fiscal reports, financial statements, and other reports for stockholders and shareholders. An accounting manager is typically part of a team consisting of other business managers. In South Africa, an accounting manager earns an average of R367,648 (Rands)/yr. 

Budget analyst 

A budget analyst prepares a master budget with current and forecast projections of business performance. They thereafter Analyse the projections with the actual performance for future accuracy and better decision making. Budget analysts are needed in all different types of companies. In South Africa, a Budget analyst earns an average of R380,000 (Rands)/yr. 

What is the average salary of a Management Accountant? 

According to PayScale, management accountants can expect to earn an average salary of R468.018 per year. Management accountants have a starting salary of R244 000 per year and that salary can grow to be as high as R716 000 per year. Ranging from the company and position you occupy. During your CIMA journey, you can expect to get lucrative compensation. Below is a diagram showing the average earnings one should expect at each level.

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