the cima student

Why is CIMA becoming more and more relevant in industry today?

Well, it’s a subject I have been giving lots of thought to recently as I embark on the strategic level. I say embark, the reality is I have yet to open a P3 text book but the plan is start after I’ve finished writing this blog post.

In my mind I believe there are three main reason why I believe CIMA is the standout qualification for those finance professionals who want to work in industry.

1. The role of the traditional accountant is dying.
2. A trend towards “Business Partnering” is emerging within the finance department.
3. You need more than one string to your bow.

The Traditional Accountant v The Modern Day Finance Professional

I actually began working as an 18 year-old trainee accountant in a small family run business and when I think of the traditional accountant, I think of my time there. Everything was handwritten in paper ledgers and a calculator was the closest thing I got to anything resembling technology.

The traditional accountant is a role that is purely focused on producing the set of monthly accounts or annual statutory accounts. There is no real analysis of insight provided to the management of the business, but they focus on ensuring the accounts reflect a true and fair picture of the organisation’s financials.

There is no nothing wrong with that of course.

Every business, large or small, needs to have accurate accounting records and financial statements but is it really a full time job these days given the advances in technology? Especially in large multinational companies.

Gone are the days of the accountant pouring over hoards and hoards of invoices, receipts and paperwork in the finance department.

Everything is electronic and streamlined, ERP systems have allowed for a huge amount of data to be collected, and processed through various ledgers and sub ledgers.

What’s more the reporting systems that are “bolted-on” to the ERP systems can provide a host of reports to management at the click of the button. There is no need for the accountant to spend their time to preparing a monthly reporting pack for the business to review if powerful, on demand reports are available.

The Modern Day Accountant

The modern day accountant, in my opinion, needs to be more attuned to the business they are working in and need to expand their horizons outside of the finance department.

They need to build relationships with multiple stakeholders (project managers, IT specialists, finance directors, logistics etc.).

Of course, the foundation of their knowledge and experience needs to lie within accounting. The modern day accountant will still need to understand the accruals concept and how the changes to IFRS 16 will impact the accounting practices but that’s only half of the job these days.

And that’s one of the reasons why I have found CIMA so interesting and practical for my job today.

It’s given me more of an insight into project management and managing stakeholder relationships. I’ve begun to think about Risk Management and the types of risks organisation’s face and how the finance department can add value to the “The Value Chain”.

All of these areas, which are covered in the CIMA P and E pillars of the syllabus are just as relevant in the finance department as the accounting itself.

Business Partnering – the future of the finance department

As I touched upon earlier, the modern day finance professional needs to be closer to the operations of the business in order to evolve their role of day to day number crunching and accounting.

How are we expected to understand the risks and opportunities within the organisation If we are not talking with colleagues in sales, logistics and credit control?

The modern day accountant can help contribute towards alleviating some of the pressure on the operations by providing analysis and insight on the critical areas like cost control on functional costs, for example.

I wonder now, if you walked into the finance department of a large manufacturing company if the finance staff could tell you the range of products they make, which ones are profitable and which ones are loss leaders?

What are the biggest challenges the sales staff face – are they frustrated by receiving monthly reports from finance one week after the period had closed?

Are they reports the finance team send actually relevant to end user?

All of these questions can be answered if finance are working alongside the business and not as a back office function.

It’s something I have to remind myself now and again, that I need to build closer relationships with other departments and keep updated with the latest company news, products and the real output of the company – otherwise I am in danger of becoming obsolete myself.

The Finance Business Partner (FBP) is a role that is becoming increasingly common these days as large successful companies have realized that the finance department really needs to be seen a partner with the day to day operations.

The Finance Business Partner will take a key interest what challenges the “shopfloor” is facing and translate the financial results into easy to digest data so everyone can understand what they mean and how they help contribute towards a more profitable bottom line.

What’s more, this kind of role illustrates how the modern day finance professional needs to operate and what skills they need. I’d say that over 50% of the skills required in this role are soft skills that are based around communication, presentations skills and negotiation.

Here is a brilliant quote that was taken from the CGMA document called “The Changing Shape of the Finance Function”

“The expectations of the finance role has changed. Finance is embedding itself across the business”

It was a quote from an interview with an Indian bank worker and really sums up how finance in industry has evolved from the traditional role of the finance function to the modern day needs of a business.

More than one string to your bow

This can be applied to any profession really but this is becoming more and more relevant in the world of finance where globalization and technology is having a big impact.

I’ve seen it myself first hand with the introduction of RPA (Robotic Process Automation) that carry out the repetitive mundane jobs in the finance department to either streamline the headcount or free up the time of the accountant so they add value by giving insights to the business on the results of the financial statements.

If all you can offer or willing to offer is data entry and repeating the same jobs over and over, then your days are numbered in the finance department.

Technology is a massive driver in the future of the finance department and it’s in the accountant’s best interest to develop their skill-set alongside this.

This needn’t be becoming an IT expert, but more of understanding change management and project management in the context of the finance department and how IT can drive the business forward.

The modern business is constantly changing and none more so than with the technology used, my own experiences alongside studying CIMA has helped me understand the challenges of change management within an organisation and how to react to different situations.

Let’s take an example rolling out a new ERP system, this will impact the whole finance department as well as the wider business. This will need a close co-operation between the project team, finance clerks, IT professionals and management of the department to help facilitate the change.

The whole finance department needs to react to this change positively in order to make it a success, and if there is resistance then the management need to spot that, understand why and come up with a strategy to negate it.

The accountant needs to develop their skills to work with the new ERP system, so that’s technical skills and communication skills to seek help and training, and also educate others. It’s counterproductive if the accountant is unwilling to change and is stuck on using the old legacy systems.

While senior managers need to under the change management process and really help to deliver the message as to why changes are being made and facilitate the rollout of the ERP system.

All of the above require very minimal accounting skills. It’s about understanding the need for change and how you can contribute to that in your role – even if you are data entry clerk to CEO. Everyone needs to play their part and evolve at the same pace as the organization.

I believe to prosper and continue to move forward in the world of finance, the finance professional needs to continue to look outside the finance department. Understand the risks of the business and finance department and learn how to collaborate with other departments and stakeholders.

Having one trick of producing a set of monthly accounts will no longer be enough.

Let CIMA shape your future in finance

I’ve worked in a range of roles in the finance but it wasn’t until about 12-18 months when I was studying CIMA that it all began in click in terms of how the role of the accountant is changing – and what skilles are needed to succeed.

The core accounting fundamentals are part of the CIMA syllabus, there is obviously no getting away from group accounts, accounting for leases and share based compensation.

But the P and E pillars of the CIMA syllabus really emphasie what else is needed to be a successful management accountant.

Stakeholder relationship, project/change management, and management styles are all just as relevant as the accounting standards themselves.

So if you can pondering your next step of your career in the finance department, think about the skills and knowledge you have gained from CIMA and see what direction it takes.

Project Manager? Finance Business Partner? Data Analytics? Finance Process Specialist?

There are a host of opportunities and career paths out there that have evolved and will continue to evolve from the role of the traditional accountant.