In the finance world there are several key professional certifications you can obtain. The two most popular certifications are the CPA (Certified Public Accountant) and CMA (Certified Management Accountant). Both certifications open the door to a rewarding career in finance, but will propel you down different paths.
While becoming a CPA is the go-to for many people, there are numerous reasons to become a CMA. These two certifications can qualify you for some of the same career paths, positions, and titles, but the differences can qualify you for entirely different career paths should you choose to become a specialist.
If you’re considering exploring a new career path as a CPA or CMA, here’s a breakdown of how they differ and tips for choosing the certification that will support your goals.
What is a Certified Management Accountant (CMA)?
A CMA is a financial accounting expert who specializes in analytics. Specifically, a CMA can work with an organization to project future financials. In a nutshell, a CMA performs the following duties:
- Forms conclusions about a company’s financial status by analyzing current and past data
- Recommends financial decisions to a company’s finance team
- Ensures all internal audits are done correctly to identify errors and fraud
- Ensures that audits comply with local, state, and federal regulations
- Identifies cost-saving actions
- Creates company budgets
Steps to become a CMA
The process of becoming a CMA is simple, but not easy. It’s simple because the process is straightforward: you need a bachelor’s degree in finance to qualify to sit for the CMA certification exam. Once you get certified, you’ll officially be a CMA.
It’s not easy to become a CMA because getting certified requires intense commitment, hundreds of hours of study, and has a 35 to 45% pass rate. If you want to be one of the few who pass the exam on the first try, you’ll need to take a full CMA prep course.
Once you get certified, you’ll need to complete several years of experience in certain positions to meet the requirements for high-paying CMA-based careers. For example, to become a financial controller most companies require at least seven years of experience as an accountant plus experience as an assistant controller.
What is a Certified Public Accountant (CPA)?
In a nutshell, a CMA performs the following duties:
- Offers tax advice to an organization or individual
- Creates financial reports
- Analyzes current and past financial data
- Reviews any number of financial documents
- Performs calculations
- Testifies in court on behalf of their profession
- Prepares and submits tax returns for organizations and individuals
Steps to becoming a CPA
The process of becoming a CPA is also straightforward: to sit for the CPA exam, you need a bachelor’s degree in business administration, finance, or accounting and you must meet state-specific requirements.
Once you get certified, you can work as a CPA for an organization, start your own, or work as a self-employed independent contractor.
The CPA exam has a 50% pass rate, but it’s still advised to take a prep course in order to pass. Several exam sections are difficult, and many people credit their prep courses for helping them pass these difficult sections.
How are CPA and CMA careers different?
Both CPA and CMA careers deal with finance, however, as a CMA you’ll be more oriented toward future financial projections. As a CPA, you’ll crunch more numbers and prepare financial documents based on current and past financial data.
Both careers are financially rewarding, but getting a CMA certification can earn you about $28,000 more per year.
Where you can specialize with a CPA and CMA certifications
With a CPA certification you can become a specialist in a variety of industries or specialized areas of work. For instance, if you love preparing taxes for large corporations, you could market yourself as a tax accountant specialist.
With a CMA certification, you have access to high-level careers that carry bigger responsibilities. Since you’ll be dealing with financial projections, you could specialize as someone with a reputation for getting businesses big results.
Which career is right for you? That depends on your goals
If your goal is simply to earn the highest salary in the finance industry, you’ll find CMA certification to be ideal. On the other hand, if you’re not focused on salary and you love the idea of working for yourself or for a company in a less intense capacity, CPA certification might be a better fit.
Either way, both careers are rewarding and the only way to receive those rewards is to choose the path that speaks to you.