Finance Business Partner vs Management Accountant – What’s the Difference?

 5th Apr 2023

As the industry changes, traditional accounting roles are transforming alongside it - this is such the case when it comes to management accountants and finance business partners.  

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 have expanded this role by appointing finance business partners, who are responsible for combining strategic understanding of the organisation with financial knowledge to help guide the business forward. 

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 roles, including: 

• Preparing monthly management accounts, financial reports and budgets, and presenting these to senior management. 

• Helping to develop financial processes that can reduce costs and maximise financial efficiency. 

• Advising on the financial consequences, risks, and implications of business 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. 

• Ensuring strong, up-to-date financial management and that variances are accounted for and explained 

As such, management accountants play a central role in an organisation's finance function, helpting to make sure that key decisions are underpinned by good financial sense. 

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

Finance business partners improve the impact and understanding of financial reporting/analysis on business reporting - they work closely with a business unit to create a partnership between operations and management and provide ‘real-time’ support and analysis to assist with business decisions. This may mean they are less directly involved in the day-to-day number-crunching, working 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, business and operational targets. 

• Working with sales teams to understand the financial implications of a commercial strategy. 

• Determining the strategic benefits of new products/initiatives, including short-term returns, risk levels and performance outcomes 

• Be embedded in the business (outside of Finance), to truly understand the underlying business and the drivers and levers of it’s performance 

This demonstrates that successful finance business partnering requires a more people-centric set of skills than conventional management accountants need. An effective finance business partner will need to show a strong commercial understanding and be able to challenge decision makers to ensure a commercially viable strategy is designed and implemented. 

A finance business partner also needs to build relationships, communicate their expertise to colleagues at all levels of the organisation, and persuasively bring people around to their recommendations.  

How should businesses and their management accountants respond? 

The advantages provided by effective finance business partners are significant enough that many market-leading firms 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. 

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. 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.