The financial world is full of a dizzying array of acronyms that can be quite confusing to anyone looking for help managing their money. CPA, CFA, CFP, and CMA are just a few of the many titles of the types of people that can help you make sound financial decisions. Here is an overview of the differences between a CPA and a CMA.
A CMA, or Certified Management Accountant, is someone that helps businesses make sound business decisions based on financial data. For instance, if you are looking to expand your business, you might wonder whether it makes more sense to try and grow into a new market or to stay where you are and expand into a different demographic in your current area. A CMA can help you crunch your numbers to help you determine which option makes the best business sense. CMA’s also make good CFO’s because they understand both business management and finances.
A CPA, or Certified Public Accountant, is someone that is almost solely devoted to merely tracking and managing your finances. As a certified fiduciary, they are authorized to act on your behalf in certain instances, such as filing your taxes or conducting a financial audit. In addition to tracking your finances, a CPA can also advise you on how to wisely spend or invest your money based on the potential tax consequences. In some cases, investing your money in specific ways can provide tax benefits that are equal to or greater than the ROI you might get on a different type of investment. In other cases, making some purchases can offer tax incentives that make them a far more attractive option than other purchases. A CPA can help you determine the wisest course of action from a tax perspective.
Both CMA’s and CPA’s must be certified, but overall the CPA certification is considered to be both the more prestigious and more rigorous of the two. That being said, CMA’s also have an entirely different degree of experience than CPA’s, which also makes them more suited to particular positions within a company. Conversely, however, a CMA certification is a relatively new certification and therefore, may not be sought out as frequently by companies as individuals with a CPA certification.