6 Reasons Why CMAs are Critical in Strategic Decision-making

Certified Management Accountants (CMA) are among the organization’s indispensable units, but most entrepreneurs don’t realize it due to their "under the radar" work style.

Do they contribute to the strategic decision-making of any organization? Let’s have a look. In the existing business ecosystem, companies are encountering increased complexity, stiff competition, rapid data distribution, and changes in global economic structure.

With the onset of cutting-edge technologies, large data chunks which businesses couldn’t capture before are now getting processed easily and in real-time. Now, the time needed for conventional accounting work has decreased dramatically. CMAs are getting involved in the day-to-day decision-making process, making management accounting more significant than ever before.

While the role of CMAs is pretty much self-evident per se, there’s a lot more hiding behind this accounting field. Read on to know the importance of CMAs in business strategic decision-making processes.

Relevant Cost Evaluation

CMAs conduct a relevant cost evaluation to figure out the current expenses and provide suggestions for the upcoming activities. One question stands out here - How should businesses spend their budget?

Before organizations take any action, they need to consider every possibility and determine the best strategy to boost the profit margins. This implies CMAs must assess various products, sales channels, services, and marketing activities to look for the most lucrative business model.

Once CMAs are done with relevant cost evaluation, businesses can make informed and evidence-driven decisions.

Make or Buy Evaluations

Since product manufacturing consumes most resources, companies must ensure apt solutions are deployed to develop products or services independently or purchase them from third parties. In this case, CMAs are appropriate to cut the knot and offer valuable suggestions to businesses.

They analyze the actual cost of each solution and find out whether it’s better to manufacture offerings internally or procure them from the manufacturer. While taking such decisions might seem a piece of cake, they’re considerably sensitive and can make or break any business.

Audience Targeting

Marketers need to keep tabs on their customers. As they anchor their business, each company has to build a buyer persona factoring in every corresponding feature, including:

• Income level

• Age and gender

• Personal values

• Academic background

• Location

• Lifestyle

However, even though marketers define the average consumer, there’s still some work to do.

Experts reckon that CMAs must assess the value of every target group to identify the most profitable units. Such kind of audience targeting will enable them to invest additional resources and hours in markets that can bring them more profit in the long run.

Lay Down Budgets

Nothing is random when it comes to budgeting. On the flip side, budget-associated decisions need to adhere to the marketing database and sales history. This is where CMAs step in to evaluate previous activities and specify investments for future actions. They devise financial blueprints for each project, department, new product, marketing campaign, or other undertakings.

Cost-cutting

CMAs analyze the work of every business unit and draw conclusions associated with the financial performance. Consequently, organizations can know the reasons for both the profit and loss generated by their departments. In these conditions, it’s much easier for senior officials to scale down operational expenses (OpEx).

For example, businesses can slash the payrolls in under-performing domains or cut down their workforce. While they can also invest in highly profitable divisions, thus enhancing the overall business profitability.

Financial Planning

The last benefit of CMAs comes from their ability to identify financial patterns and forecast future events. They help businesses stay up to date with the current industry trends, allowing them to react timely and implement strategies to stay ahead of their peers.

Moreover, CMA’s planning potential empowers organizations to devise long-term business policies. Doing so, ensures that the entire workforce stays on the same line and constantly works toward achieving the business objectives.

Concluding Thoughts

Data accuracy and precision are paramount to the success of every business. Without valuable and meaningful insights, companies can barely assess the existing situation or plan future business moves. In such circumstances, CMAs emerge as the pillar of strength for today’s business.

They offer scientifically and statically driven financial insights which play an instrumental role in strategic decision-making. This approach is gaining even more prominence as the global economy demands an additional calculative method to sustain businesses. And ignoring the same can lead to grave consequences.

Miles Education is a premier training institute for finance & accounting professionals looking to earn US CMA credentials. The focus of Miles Education has always been to up-skill students and professionals to help them be future-ready and enable their career progression through the US CMA qualification.

Committed to achieving this goal, today, Miles is India's largest and #1 CMA review course! It has been instrumental in building India's CMA ecosystem, holding offices in 9 cities and partnerships with 100+ MNCs, including all of the Big 4s. Miles Education provides student/professional-centric services while keeping concept-based learning at its core which has helped it climb to the top ranks in the US CMA course in India.

Miles Education is India's #1 CPA, CMA & CFA with presence across India, Middle East & US. Miles Education up-skills students & professionals to be future-ready with a career progression in Accounting & Finance.