The business landscape is changing at an increasingly rapid rate, and accounting professionals must be able to keep pace with accompanying changes. The competencies and skills used by finance professionals, particularly those working in business, industry, government, or not-for-profits, must evolve to include areas not traditionally associated with accounting.
The modern finance professional is responsible for accounting and reporting as well as performance analysis and business planning. In addition, many are asked to participate in initiatives beyond the traditional scope. The CGMA Competency Framework, focusing on technical skills, business skills, leadership skills, and people skills, encompasses the broader set of abilities that accounting professionals need in the 21st century.
Stepping back and analysing the broader business environment, before diving into examples of how the competency framework’s four skills can be integrated into day-to-day business, provides important context.
First, as nontraditional data such as sustainability and corporate governance increase in importance, the need for reporting and analysis threatens to outstrip the ability of organisations to carry out said analysis. Quantifying, ranking, and reporting on these types of qualitative information requires that management accountants move beyond traditional roles focusing exclusively on reporting and analysis. Much has been written about this dynamic, but without specific examples, turning sentiment into action can be a challenge. This links directly to the leadership and people competencies highlighted in the framework.
Second, as organisations are integrating nontraditional and qualitative data, the increasing use of analytics for business decision-making represents another opportunity for management accountants. Digitisation has revolutionised how organisations interact with one another, and how customers interact with the organisations that provide goods and services. It is increasingly apparent that the organisations most successful in the future will be the organisations – and management teams – that are best able to apply data and analytics to make decisions.
Management accountants and organisations that are able to make effective use of the information generated as a result of operations and the analytics performed on this data will be best situated for success in a global, digital economy. This is where the remaining two areas of the CGMA Competency Framework – technical and business skills – are vital.
Here are examples how each of the four competency areas can be applied:
Technical skills. From lease accounting to changes in how not-for-profit entities have to report and classify assets to the continual integration of US GAAP and IFRS standards, the need for accountants to remain on top of changing technical requirements cannot be overstated. Virtually every organisation receives updates and information from the US Financial Accounting Standards Board or other organisations; why not consolidate the relevant data for a quarterly update? Led by the controller or equivalent accounting leader, a presentation and a handout would assist in keeping accounting staff up to date, and would demonstrate to senior management the commitment to being relevant in a changing marketplace. This holds true especially for compliance, environmental, and governance reporting that continues to evolve.
Business skills. Running a business is much more than simply being up to date on changes to accounting standards and disclosure requirements; organisations need a wide variety of data in order to run effectively. As organisations, with increasing frequency, consolidate the role of COO and CFO, the trickle-down effect is palpable. Understanding management theory and analytics meshes well with the framework as well as with the emerging role of the accountant as strategic business partner. Management accountants must see the big picture to interpret how market and industry changes might affect decisions.
Leadership skills. The increasing responsibilities and duties placed on finance professionals have led to a redefinition the role. As organisations enter into partnerships, agreements, and licensing deals; launch online initiatives; and expand internationally, finance professionals must lead in assessing and communicating applicable information. Finance professionals participate in, and sometimes lead, initiatives related to information technology, corporate communication, and performance improvement. Volunteering to be a part of an IT project related to account structure and reporting, for example, is one way to exhibit leadership outside of traditional accounting. The ability to clearly articulate positions and ideas is integral to accountants developing leadership capabilities.
People skills. Interacting with other individuals, even in a digital, instant-message world, is a skill that finance professionals should continually practice and improve. While the bulk of work led by the accounting function is quantitative, finance professionals who wish to be considered for leadership roles must be able to communicate without burying the key message in jargon. Accountants who can effectively collaborate with other teams will position themselves for leadership roles. Simplify the message, focus on data that link to the business question at hand, and provide your audience with takeaway points. This helps ensure the message will be acted upon and not relegated to an amorphous to-do list.
—Sean Stein Smith is a financial analyst at Hackensack University Medical Center in Hackensack, New Jersey. He is an adjunct professor at Fairleigh Dickinson University and Montclair State University.