Companies that empower finance professionals to take a broader role in the future of the business are getting it right.
A new CGMA report suggests better-performing companies offer broader responsibilities to the finance department. The business managers still expect the accounting basics, but they also seek insight and advice.
The report, New Skills, Existing Talents – The new mandate for finance professionals in supporting long-term business success, shows that a company is better equipped to reach its goals when finance professionals take on a more influential role in management decisions.
The responsibility of getting finance professionals to think about their job in a different way falls to both the employee and employer. The companies must invest time and training but also make the role change more of a mandate to the finance professional.
“Beyond their core technical skills, finance professionals must move beyond their comfort zones to build business and commercial capabilities and managerial skills,” the report says.
Business managers said that finance professionals need to offer insight and advice, not just information, if they intend to take on a broader role. Finance professionals also need to offer practical solutions and not isolate themselves from the business. Communication skills also are important.
“Accountants are very good at managing processes, but they often don’t have the wider business understanding or the strategic overview which they would need if they aspire to contribute more to ensuring the success of the business,” Hugh Simons, COO of Ropes & Gray LLP, says in the report. “An accountant will produce a very comprehensive and accurate report, which is a strength, but often what management really need is some actionable insight supported by analysis that is directionally correct.”
The report’s findings include:
Business needs for basic accounting information are being met, but there is an unmet need for better nonfinancial information.
Finance professionals recognise the skills they need to shift their roles, but they’re sometimes too busy with essential duties, such as internal reporting requirements, to be part of decision-making.
Higher-performing organisations count on finance for managing risk and complexity at a much greater level than other companies rely on finance for those roles.
Finance managers have a greater view of their value than other managers do. More than 70% considered themselves “highly” or “greatly” valued. Fifty-four per cent of non-finance managers assigned those value qualities to finance managers.
The New Skills, Existing Talents report’s conclusion says finance professionals have the skills to move forward but that a change in priorities is needed. Overcoming inertia, their own and the company’s, is the first step. The report lists several actions for management accountants to gain a broader perspective and add value to their company. Among the actions:
Leverage “big data” to focus on forward-looking information and insights for decision-making.
Be active in understanding and linking intangible, nonfinancial data with financial numbers. Translate those numbers into insight.
Invest time in communicating strategies on efficiency measures and other value-driven initiatives to the entire business.
Additional CGMA resources:
“The Fast Track to Leadership”: In many organisations, finance is supporting the business to meet its strategic objectives and building a sustainable business model so taking it beyond its more traditional role of finance stewardship and operational responsibilities. In these forward-looking organisations, finance is evolving from a focus on the transactional and cost efficiency areas through an analytical and decision support stage to a real strategic focus where it can make real impact.
“The Invisible Elephant and the Pyramid Treasure”: There has been an unprecedented change in the demands of leadership over the past decade – change that has highlighted a need for leaders who prioritise the true stakeholders of their organisations – customers, employees, suppliers, the community, the planet and the shareholders – rather than putting personal reward first.
“Rebooting Business: Valuing the Human Dimension”: The human dimensions of business—for example, customer and supplier relationships, talent development as well as intellectual capital—will be the focus in the months ahead.
—Neil Amato (firstname.lastname@example.org) is a CGMA Magazine senior editor.