When non-financial people think of the role of the finance professional in business, what is their perception? Is it that of a scorekeeper--or, worse, a bean-counter? Or is it that of a dynamic driver of business performance?
Finance professionals are responsible for a wide range of activities in their organisations. External financial reporting is one such crucial task. It must be done professionally and accurately, complying with all the necessary standards. Certainly, regulatory compliance has forced it high on the agendas of boards, CEOs and CFOs.
Confidence in business is essential, so stakeholders must receive accurate financial reports to maintain this confidence. But what they actually want is for organisations to create sustained shareholder value and business success--they want performance. They should be able to take conformance with financial standards as read.
Financial reporting is a technical skill that quantifies the value created (or lost) in an organisation, yet this activity does not create value in itself. The increasing pressures and complexities of compliance can easily distract finance professionals in business from their main function, which is to help create value. If we are to convince non-financial colleagues that finance is not all about scorekeeping, we must be seen to walk the talk as true value creators.
Chartered management accountants differentiate themselves by being value creators in their organisations, getting the balance right between driving performance and reporting on performance. Finance professionals need to use their skills to identify and report on the true drivers of performance, finding the unique factors that are the engine of their organisations' economic success. These drivers are not always evident and many management teams do not truly appreciate them. But the most successful companies fully understand them, articulate them internally and base their tactical and...