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The time has come to seize the opportunity

Finance leaders can play a crucial role driving value creation, says Andrew Harding, Chief Executive – Chartered Institute of Management Accountants (CIMA)

Finance professionals have long been guardians of all things financial but the business world is now demanding much more than this. Today, the finance professional has to create value and not just guard it. They have to translate data into relevant, understandable and actionable business insights that deliver better services, lead the way for better decision making and create value. The role of the Management Accountant is on the move.

With technological advances, demographic shifts, market upheaval and evolving customer expectations affecting business models and forcing organisations in every sector to rethink the way they operate. AI and automating processes are driving change and there is a greater need for businesses to adapt new strategies so they can add greater value beyond their services. Unless businesses adapt, they risk their long-term existence.

This mandate empowers the finance team to act as a guardian of the business model and an enabler of the organisation’s ability to add value in the digital age. It calls for finance to move from being a technical back office function, mainly focused on budgeting, planning and reporting, to being commercially minded, working with internal and external stakeholders to discover new opportunities.

The finance function is in an ideal position to make this transition, as the team has a unique end-to-end view of an organisation. Every business activity has a financial consequence and management accounting already provides the framework for performance management. Second, the chief financial officer (CFO) is already a steward of the business, with the necessary knowledge and skills to help lead the organisation alongside the chief executive officer (CEO). So, how can finance functions take up this new mandate?

How should the finance function adapt?

According to research from the Association of International Certified Professional Accountants (AICPA & CIMA) on the changing role of finance, finance professionals need to apply the same skills they use to perform their most basic activities – assessing finance risk, reconciling accounts or compiling management reports – to the much broader process of developing and deploying solutions with the rest of the organisation.

This means drawing on their ability to put together information, analyse for insights, influence decision makers, suggest impactful actions and demonstrate commercial acumen (the core accounting skills), and combining this with guiding strategic decision-making, partnering with peers, managing risks, implementing projects and providing trusted management information.

Through fusing together four broad roles – reporting, scrutinising, developing solutions and deploying solutions – finance functions will be able to step up and become the custodians of organisational value in future. However, to achieve this, finance professionals will need to shift from a pure accounting approach to a holistic management mindset, and one where their value will be determined by the impact they have on their organisation.

Finance professionals have been seen as technical experts, comfortable with accounting jargon and having a keen interest in facts and figures. The digital world requires change, though. Management accountants today must become commercially minded problem-solvers who can handle ambiguity and speak the language of the business fluently. They will need both commercial and people skills that will allow them to collaborate effectively with colleagues from all areas of the business, as well as external stakeholders. In addition, they need to move from scorekeepers to storytellers. Only then, will they win a seat at the leadership table.

Finance now has the mandate to define, enable, shape and tell the stories of how an organisation creates and preserves value. While this presents a wealth of opportunities for the profession, it will only be the organisations and finance professionals that adapt who find themselves in a position where they can truly take advantage of all a digital world offers.  The time is right for finance and finance professionals to step up to the plate and seize the opportunity.

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