Finance Business Partner vs Management Accountant: the differences explained

In recent years, many organisations have expanded the roles of management accountants to give them more responsibility as full-fledged finance business partners. This arrangement can offer numerous benefits, empowering accountants to provide broader and more impactful strategic support.

In the business world, organisations are constantly evolving the roles and responsibilities of their key team members to empower them to do their best work for the company. Accounting positions are no exception to this, especially at the qualified level.

Management accountants have always, and will always, play a crucial role in helping organisations to coordinate their financial reporting and gain key insights into business performance. However, many companies are looking to expand this role by appointing finance business partners, who are responsible for providing broader and more holistic leadership advice and support.

Here, we will explore the differences between a management accountant role vs that of a finance business partner, in order to explain the role that both can play in helping companies achieve their full potential.

What is the traditional role of a management accountant?

Every organisation relies on their management accountants to play an essential role in the overall pursuit of financial success. Working as part of an accountancy or finance department, they are responsible for various key functions, including:

• Preparing monthly management accounts, financial reports and budgets, and presenting these to senior management.
• Helping to develop business strategies that can reduce costs and maximise fiscal efficiency.
• Advising on the financial consequences, risks, and implications of commercial decisions, ensuring that income and expenditure align with the budget.
• Developing and overseeing the implementation of the company's financial systems and procedures, while spearheading new initiatives to improve these.
• Securing and arranging finance for new projects.
• Providing basic support across the finance team, including assistance with business-as-usual (BAU) accountancy tasks.
• Communicating financial information to non-finance members of staff at every level of the organisation in a digestible manner.

In these ways, management accountants play a central role in an organisation's finance function, driving business performance and making sure that key decisions are underpinned by good financial sense.

How does the work of finance business partners differ from this?

Many businesses are looking to build on the existing benefits that management accountants provide by expanding their remit, leading to the creation of the finance business partner role. This is more than just a change in job title, as finance business partnering requires professionals to take on a more holistic and strategic leadership role.

Finance business partners play a much larger role in business decision-making, working directly with senior management to offer analytical insights, strategic guidance, and expert views on whether the current management approach will deliver on the company's goals. This may mean they are less directly involved in the day-to-day number-crunching, working more centrally as commercial decision-makers.

Here are some of the responsibilities that successful finance business partners might be expected to take on:

• Partnering with business owners, directors, senior management, and other key stakeholders to provide financial knowledge and expertise at the highest level.
• Working with department heads to determine key performance indicators and financial targets.
• Supporting HR to calculate compensation packages and salary trends, including reviewing forecasts and assessing the underlying soundness of the strategy.
• Working with sales teams to understand the financial implications of a commercial strategy.
• Determining the strategic benefits of a research & development project, including short-term returns, risk levels and key performance indicators.

As such, successful finance business partnering requires these professionals to demonstrate a broader and more people-centric set of skills than conventional management accountants need. Instead of focusing on the BAU aspects of accountancy, an effective finance business partner will need to show a strong commercial understanding of the business's goals, and be able to challenge decision makers to ensure a commercially viable strategy is designed and implemented.

A finance business partner needs to do more than understand the underlying numbers - they will need to build relationships, communicate their expertise to colleagues at all levels of the organisation, and persuasively bring people around to their vision. In these ways, finance business partners act as much more than a financial analyst, instead becoming a true part of the leadership team.

How should businesses and their management accountants respond to this trend?

The advantages provided by effective finance business partners are significant enough that many market-leading organisations have stepped up their recruitment for these roles in recent years. Hiring a finance business partner can deliver valuable benefits in terms of commercial decision-making informed by sound financial sense, and the most ambitious companies are keen to take advantage of this.

As such, organisations that wish to remain competitive should consider whether there is scope to appoint finance business partners within their business, whether in terms of hiring externally or upskilling their existing finance professionals. This will require a commitment to creating a distinct new role, rather than simply renaming an existing one, and will depend on senior leaders being willing to embrace the appointee as a true business partner and trusted adviser.

Meanwhile, management accountants who see financial business partnering as a viable career progression option should work to upskill themselves, developing their commercial understanding and interpersonal skills to put themselves in a position to take on these roles. For many, this may be one of the best ways of putting themselves in the frame for promotion to senior management level.

Find out more

For more insights into the latest trends affecting accountancy recruitment and the ways that businesses should react, visit Sellick Partnership's Finance & Accountancy hub.

If you are an accountancy professional seeking a role as a management accountant, or a business looking to hire for this role, give us a call on 0161 834 1642 to find out how we can help.