The functions of management accountant depend upon his status in the organization, agreement with the organization, experience and capacity of the management accountant. On this basis, the functions of management accountant are briefly explained below.
Functions of management accountant
1. Planning of Accounting Function
An accounting system is maintained in an organization which should cover standards of costs, sales forecast, production planning, profit planning, allocation of resources, capital budgeting and short term and long term financial planning. Moreover, he has to prepare the necessary procedures to implement the plan effectively.
The management accountant has to measure the actual performance and compare with standard. Based on this comparison, he has to find the differences and interpret the results of operation and submit the same to all levels of management. This is done through appropriate accounting reports for controlling.
The top management requests the management accountant to prepare the report for the root causes for an unfavorable event or operations. In this report, the accountant can pin point real reasons and the persons who are responsible.
He consults all levels of management for framing a policy or an action programme. Such type of consultation brings co-ordination between the accounts department and top management.
The accounting information is modified and presented before the management with interpretation. The interpretation is made in different phases. If so, real reasons for the operating results can be understood by the management.
He has to evaluate the effectiveness of policies, organization structure and procedures adopted for attaining the objectives. For which, he has to consult the same with functional managers and top executives.
He has to advise the management in order to improve the performance of operations.
8. Administration of Tax
A business organization is liable to pay value added tax, income tax and other taxes to the local government, state government and central government. In this aspect, the management accountant is expected to pay the taxes and maintain the accounting records as the case may be.
9. Government Reporting
He will have to supervise all the statements and returns which are to be submitted to the government periodically within due date.
10. Appraisal of External Effects
There may be changes in the state and central government policy. Sometimes, there may be amendments in the existing laws. These policy changes and amendments have an impact on the attainment of business objectives. The extent of impact has to be assessed by the management accountant.
11. Economic Appraisal
The economic condition of the nation is periodically published by the central government. Now, the management accountant is to make economic appraisal and find the influence of economic condition over the business activities. In this aspect, he can prepare a report and submit before top management along with his/her comments.
12. Protection of Assets
This function is performed through maintenance of separate fixed assets register for each type of fixed assets. Moreover, he can frame the rules and regulation for using each type of fixed assets. He can take insurance coverage to all types of fixed assets.