Management accounting is most often used in big companies where there are several departments and a managerial team that oversees daily operations. The management accountant has some very specific, but very relevant, job duties to perform. They apply mostly to money, of course, and they include the following.
Handling Petty Cash
Petty cash is the extra money given to each department to use scrupulously for special occasions or office needs. Usually, you would assign this task to the managerial accountant because they are the ones that decide whether or not money can be spent on certain things. They keep a running log of how much petty cash was spent, for what, and why. The receipts for every purchase from petty cash also go into the petty cash box to prove that the money was spent as logged.
When an employee asks for a raise, you consult with the managerial accountant to see if your company can afford it. If there is enough money to grant the raise, then the managerial accountant has to provide you with the information to show that, plus the amount of the raise that can be granted without hurting the company's bottom line.
Bonuses, like raises, require a close examination of the company's as well as the department's accounting books. While it is not necessary to give all employees an annual bonus, it does boost morale. Of course, that may not be possible if the company has not earned enough profits to cover a bonus for everyone for the year. A discretionary bonus may still be granted to managers alone if you so choose.
Examining Financial Risks to Further Company Interests
Finally, there is the task of deciding if you can take risks with company money to further company interests. The managerial accountant assesses the risk you want to take to see if the loss is minimal and to see if the benefits outweigh the possible losses. For example, say that you want to invest company funds in mutual funds in an attempt to double the money in the employee retirement fund. If the gains are extremely beneficial to everyone, and the losses negligible, the managerial accountant may grant you permission to proceed.
On the other hand, if the losses could almost bankrupt your company, the risks are too great. The managerial accountant would advise against it, and try to dissuade you from pursuing this. Only your board of directors and/or the trustees of a company could completely block you, but the report from the managerial accountant would be enough for the boards to nix your plans. Accountants like Dale K. Cline, CPA PLLC can help.
Nothing is worse than doing your bills, only to discover a sudden expense. When I was in college, I found myself trying to make ends meet by working three jobs and skipping meals occasionally. However, managing your finances doesn't have to be difficult. If you can learn how to save money and make better decisions, you won't have to worry about being able to afford the necessities. My website is filled with information that can help you to manage your money without completely altering your lifestyle. As you go through these articles, I hope that you can find information to help you on a daily basis.