There are multiple paths you can choose in accounting. Becoming a Certified Public Accountant (CPA) is the most common choice. However, you can also become a Certified Management Accountant (CMA).
While both certifications share similarities, there are key differences that make obtaining a CMA certification ideal.
1. You’ll make more money as a CMA
As a CMA, you can expect your base salary to be somewhere between $70,000 and $100,000 depending on your industry. CPAs, on the other hand, can expect to earn between $44,000 and $120,000 per year.
You have to be a highly specialized CPA to earn an income in the upper range. The same is not true for CMAs. That’s because CMAs have bigger responsibilities than CPAs and it’s slightly harder to become a CMA in the first place.
The CMA exam is hard, but passing is financially rewarding
Passing accounting certification exams is no walk in the park. However, CMA exam pass rates are 10% lower than CPA pass rates. While around 50% of candidates pass the CPA exam on the first try, only 40% pass the CMA exam.
Although both exams are difficult, they’re easier to pass after taking a prep course. For example, the CMA prep course from Wiley offers more than 1,110 practice questions, practice tests, and uses predictive scoring to gauge how you’ll do on the real exam. CPA prep courses offer similar benefits.
While the difficulty might seem like a good reason to choose CPA certification over CMA, it’s not. Consider the extra difficulty a worthy challenge. If you can meet that challenge, the financial rewards on the other side will be sweet.
2. CMAs have better options for company positions
If your goal is career advancement, CMA certification will help you achieve that goal. There are 7 main career options for a CMA:
- Chief Financial Officer (CFO)
- Accounting Manager
- Senior Accountant
- Management Accountant
- Financial Analyst
- Cost Accountant
- Corporate Controller
These positions pay more at entry-level than simple accounting positions you’ll get with a CPA license. The pay is higher because in most of these positions, you’ll do more than just accounting work. That brings up the next point.
3. CMAs can do much more than accounting
While CMA certification is within the realm of accounting, it’s a certification that allows you to play a much broader role. For example, CMA certification focuses on strategic planning and decision-making. As a CMA, you’ll be consulting with upper management teams to help them make important business decisions.
In other words, a CMA is a leadership role in addition to accounting. You’ll be trained to guide business decisions, manage financial risk, and even help monitor business performance. You’ll become familiar with various analytics programs that analyze data and you’ll use that data to help organizations make sound and strategic financial decisions.
4. CMA roles are more interesting than CPA roles
If you just want to keep your head down at your desk and crunch numbers, then CPA certification is your best option. However, if you want to be involved in the company you work for and do more than just crunch numbers, CMA certification is the best choice.
As a CMA, you’ll never be bored. You’ll always have engaging tasks and responsibilities. You’ll always be using your brain to strategize with company officials and you’ll feel more like you’re part of the team rather than just the accountant.
5. You’ll be more profitable if you start your own business
Many financial professionals choose to start their own businesses. While CPAs often work for themselves, they’re limited in the services they can provide and often get stuck preparing taxes.
As a self-employed CMA, you’ll have the qualifications to help other small businesses and entrepreneurs with financial decisions. Since your help will directly impact their profitability, you’ll be able to charge more for your services than if you were to simply prepare documents.
If you gain several years of experience before starting your own business, that will be even better. Your value as a self-employed CMA will increase as you gain more experience in any given industry. On the other hand, your value as a CPA won’t increase that much over time.
If you want to stay engaged, become a Certified Management Accountant
Although you’ll make more money as a CMA, you’ll also stay engaged in your work. Money is certainly important, but if your job becomes repetitive, the money may lose its excitement. If you want to use critical thinking skills and stay engaged, CMA certification will be your best option.