The Benefits of Studying CIMA

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

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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.

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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.

CIMA: Exam Tips

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.

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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.

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The Week Ahead – 18th April 2016

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It’s been a tough of couple weeks for me personally in terms of getting back on track with my CIMA F2 studies after failing at the beginning of the month. The Kaplan exam kit arrived so I could start revising again but I’ve yet to open it. But nevertheless a new week brings new hope!

There was little activity on the site last week due to the fact CIMA was at the back of my mind but I intend to rectify it this week.

CIMA News

The May sitting of the case study exams are approaching and you can find the preview videos on the pre-seen analysis below. Worth a look and contain over 30 minutes of video for each paper – OCS, MCS, SCS – they will get you on the right track passing the upcoming CIMA case studies. For those sitting the OCS exam next month you can read how I passed it here.

May 2016 OCS – Sanchez Navarra

May 2016 MCS – IC Optical

May 2016 SCS – Dreem Park

The CIMA Student Website

This week I’ll look at each May case study paper in terms of industry analysis as well focusing on an F2 topic I will be revising this week. Most likely long term leases and how to calculate them using the sum of digits method.

If you have any suggestions in terms of content for the site then please reach out to me on thecimastudent[at]gmail[dot]com.

Happy Studying!

 

E2: Useful Links and Resources

E2

E2 Project and Relationship promotes an integrated approach to managing organisations from an internal and external perspective. It takes the knowledge you have gained from the E1 paper and builds on it by looking at the concept of strategy and how it can be implemented by people, projects, processes and relationships.

Here are a come useful websites and links to get you started on your way to passing the E2 Project and Relationship Management paper.

E2 Useful Links and Resources

Astranti Managerial Membership – Free Study Text 2015 – Astranti provide free study texts for ALL of the CIMA  papers and I use them as a base for my exam preparation. They are easy to digest and can be accessed anywhere with an internet connection.

CIMA Connect E2 group – the official CIMA connect page for E2 students. You can find articles on the E2 syllabus as well as a place to discuss the paper with other students and CIMA moderators.

The Change Process – study notes released from CIMA on the change process within an organisation. Discusses how companies should counter internal resistance to change.

How to Keep Mega-Projects on Target – a useful insight to the world of project management and how management accounting can be used to keep global projects on track. Falls under area D of the E2 syllabus.

Acorn Financial Training – Acorn provide class room tuition and home study materials. You can get an extra 10% off ALL of the acorn materials (including E2). Here can find the full the list of materials they offer and to claim the 10% discount please email thecimastudent[at]gmail.com with the items you wish to order.

If you have any additional resources you would like to share with other students for the E2 CIMA paper then please then a link in the comments box below.

The Week Ahead – 1st February 2016

It’s the beginning of February and the case study exams will soon be upon us.

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Feb 2016 Case Study Exams

The OCS students are in their final week of preparation for the exam and should be making sure they have every angle covered (not just the theory). So this means, you should be brushing on Industry research as well covering ETHICS! And perhaps a final mock exam to give yourself more confidence.

Here is an article I produced in December on how I remember the key points on Ethics.

Meanwhile, the MCS and SCS students still have a week or two until they sit their examinations so there is still plenty of time to get stuck into the mock exams to prepare you for exam. Also, use the upcoming time to focus on Industry research so you can apply some real life scenarios in your upcoming exam.

The CIMA Student Website

This week I have an article that covers industry analysis for OCS, MCS and SCS for some last minute revision. I have picked out some helpful links for all three levels as well providing preview videos of the Astranti industry analysis.

Meanwhile, on Friday, I will be sharing some tips and views (taken from the CIMA connect site) from students who have already passed their respective case studies.

As always, I would love to hear from CIMA students out there who would like to share any exam tips and resources. You can leave comments below or email me on thecimastudent[at]gmail[dot]com.

Happy Studying!

 

Social Media Accounts to Follow!

It’s almost the end of the working week and the perfect time to brush on your social media accounts to follow. I have researched, short-listed and drawn up a list of people and accounts you should be following on twitter.

Here they are (in no particular order).

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@CIMA_News
– the official CIMA twitter account is a must follow. They generally reply very quickly to tweets and provide the latest CIMA news and press releases.

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@AstrantiFT
– an excellent training provider of CIMA materials and they regularly have competitions giving away materials and discounts to their products. I’ve used Astranti materials when passing the Operational Case Study.

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@PQMagazine
– award winning magazine for part-qualified accountants. PQ Magazine share the latest industry news. Very informative.

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@CIMATanya
– Head of Ethics at CIMA. Ethics is an under-rated topic for your CIMA revision – try and apply it where you can. SO this is the ideal twitter account to follow to keep up-to-date with Ethics and CIMA.

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@AccountingWEBuk

-A great source of information for the accounting professional. The Accounting Web UK twitter account posts all of the latest industry news. Well worth a follow.

The Week Ahead – 18th January 2016

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Last week was a much more productive week for me personally in regards to my F2 studies. I managed to catch up on some slack from week one as well the week two topics I planned to cover.

Here is what to expect for the week ahead on The CIMA Student.

CIMA News

There was an interesting press release from CIMA that suggested that performance at work is dictated by peoples biology rather than effort or rewards. If you’re interested you read it in full here.

On a more light hearted note, the “19 things you need to stop saying (because you sound like a corporate robot)” article on mashable.com should raise a few smiles.

The CIMA Student Website

The examiners report for the November 2015 OCS was released last week and I will be providing more details and opinion on how the exam was received. The examiners report is an excellent resource provided by CIMA that many students will overlook or gloss over.

Also be sure to keep your eyes peeled for an article later in the week that covers all of the best CIMA and CIMA related social media accounts to follow.

Budgeting and Beyond!

Budget concept
While studying for the operational case study I was revising the budgeting section of the P1 syllabus and the idea of Beyond Budgeting really struck a chord with me.

Traditional budgeting methods, in my opinion, are becoming outdated and counter-productive. The idea that departments will needlessly spend in the final months of the year to ensure their budget is not cut the following is crazy.

Traditional Budgeting Methods

I’ve seen this first-hand when managers have been scrambling around in November/December to spend their capital expenditure budget so they got the same amount the following year. I was relatively new to the company and quizzed a colleague as to why there was so much spend in December and she told me “Well, they will lose their budget next year if they don’t spend all of this years”. Madness.

Beyond Budgeting: A new approach

So Beyond Budgeting looks to rectify these problems by abandoning traditional methods  – the two main drivers for this are;

1. A more adaptive set of management processes
2. A highly decentralised organisation

Beyond Budgeting empowers management by giving them the freedom to achieve their goals without the need of a rigid set of budgeted numbers. Instead, front line management are given goals that are in line with shareholder value and the bigger picture.

As one of the main criticisms of traditional budgeting methods is the fact it’s too short-term in it’s thinking.

These goals are measured using a set of KPI’s, industry benchmarks, customer satisfaction and revenue or market capitalisation.

Hope and Fraser identified 6 shared common principles that should be used by all companies who want to adopt a Beyond Budgeting technique:

– A governance framework based on clear priorities and boundaries.
– A high performance climate based on visible and relative success at all levels.
– Front line teams with a freedom to take decisions in line with the company’s governance principles and strategic goals.
– Teams given responsibility for value creating systems.
– Teams focuses on customer outcomes.
– Open and ethical information systems.

If applied correctly, the beyond budgeting process rewards the high performers within the company and not just the skilled budget negotiators.

Other key benefits include accountability and ownership by empowering the front line teams to make decisions. And, of course, there is less waste as managers are encouraged to work towards medium and long term strategic goals rather than traditional annual budgets that produce unnecessary spend.

CIMA produced a topic gateway document on Beyond Budgeting that can be found here and makes for interesting reading.

Beyond budgeting is:
‘An idea that companies need to move beyond budgeting because of the inherent flaws in budgeting especially when used to set contracts. It is argued that a range of techniques, such as rolling forecasts and market related targets, can take the place of traditional budgeting.’
CIMA Official Terminology, 2005