Finance Manager Skills And Competencies
Finance Manager Skills And Competencies – Management accounting, like many fields, is being disrupted by new technologies, including big data, predictive analytics, artificial intelligence, blockchain, machine learning, and robotics process automation. Established accounting and finance professionals think they have the critical knowledge and skills to advance their careers in this new practice, new professionals seeking information on the core technical and soft skills needed to handle the role and current students in accounting considering a career in finance and accounting can benefit from using the Institute of Management Accountants’ (IMA) newly updated Management Accounting Competency Framework to help identify today’s essential skills.
Accounting and finance teams typically focus on value management, financial reporting and compliance. Research by IMA and others, however, has documented the ongoing transformation of the finance function, which is becoming more strategic and shifting towards higher strategic activities and away from day-to-day operational activities with lower added value. sing. Today’s finance development responsibilities include creating value, providing business insight and being a strategically oriented business partner. These are critical competencies and areas of global focus as organizations seek to gain market advantage in an increasingly competitive and commoditized business environment.
Finance Manager Skills And Competencies
To be successful, management accountants must use more sophisticated analysis. In the past, management accountants had to provide descriptive and diagnostic statistics. As Exhibit 1 shows, the profession needs to move to the higher end of the analytics continuum—toward predictive, prescriptive, and adaptive analytics.
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Accountants and finance professionals have always been central to data-related work. Today, as the data revolution is causing major changes in the landscape, the nature of finance is deeply affected. While technological change will present challenges to management accountant careers, it will also present opportunities. Finance professionals will be relieved from repetitive tasks such as billing, management reporting and general accounting. They will spend less time collecting and managing financial data and more time evaluating, analyzing and interpreting it. They will be able to spend more time spotting trends, developing insights and connecting with leadership.
As organizations adopt new technologies, ethical business practices must grow and evolve gradually. Questions such as how much privacy employees and customers have, the extent to which technology can be used to gain insight into competitors, and the extent to which employers should monitor employees’ electronic activities are becoming increasingly critical. At a time when organizational value is increasingly derived from intangible assets such as brand equity, failure to prescribe and follow ethical practices has the potential to negatively impact the organization.
In line with finance’s traditional role of establishing policies and procedures to protect organizational resources and overseeing compliance efforts, the profession is often viewed as an ethical leader. Advances in technology will only increase the importance of this role. As management accountants move away from compiling and reporting information and take on a more strategic role, they will encounter complex business situations that require an understanding of how to act in an ethical manner. Management accountants must act in a manner that upholds the ethical guidelines and values of the profession.
With changes in the business environment, IMA has recognized the need for management accountants to acquire new skills and abilities to achieve career success. The recently updated Management Accounting Competency Framework (http://bit.ly/2KX2u0S) outlines the skills management accountants need to protect their careers. The framework is presented visually in Exhibit 2.
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The updated framework organizes the core competencies for management accountants into six knowledge domains. Exhibits 3 and 4 contain descriptions of domains and competencies. This domain differs from those in the previous framework in important ways, as discussed below.
Strategy, planning and performance. Strategic management includes activities such as competitive analysis, forecasting and budgeting, operational decision analysis, enterprise risk management, and innovation.
Notification and control. As robotic process automation (RPA) is increasingly being used to automate accounting processes, management accountants must be able to assess the efficiency and effectiveness of accounting processes and provide recommendations for optimization. They must also implement sophisticated costing techniques and procedures to ensure data security, protect assets and meet legal and reporting requirements.
Technology and Analytics. As big data matures, management accountants need knowledge of data extraction tools for mining structured and unstructured data. They must be able to use data analytics tools that collect, organize and analyze this data, as well as create data visualizations and stories.
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Business and operations acumen. Business acumen includes industry-specific and operational knowledge as well as quality management, continuous improvement and project management skills.
Leadership. Soft (personal) skills in areas such as motivation and collaboration with others, communication, change management, talent management, relationship management, negotiation and conflict management will remain critical for management accountants.
Professional ethics and values. The evolution of technology and analytics creates new ethical dilemmas that accounting and finance professionals must address. As management accountants become more involved in the strategic planning process, there will be a greater need for professional skepticism about the inputs and assumptions in the process.
This domain includes the competencies needed to envision the future, lead the strategic planning process, guide decisions, manage risk, and monitor performance. It includes competences in the domains of planning and reporting and decision-making from the previous framework. The withdrawal of all competencies related to strategic planning and performance into one domain reflects the evolution of the management accountant’s role and the increased importance of strategy formulation, validation and implementation.
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In line with the increased emphasis on strategic management, the accounting and cost management competence in the previous framework is divided into two parts: Strategic cost management and cost accounting, with the former included in the new Strategy, Planning and Performance domains in recognition. on the important role that cost management plays in strategic decision making.
This domain includes the competencies required to measure and report organizational performance in accordance with relevant standards and regulations. As such, it addresses the traditional role of management accountants to provide oversight and hindsight. However, as the role of management accountants evolves, these responsibilities remain important and continue to evolve.
While it includes many competencies in the planning and reporting domains of the previous framework, this new domain also includes new ones, including tax compliance and integrated planning and reporting. This reflects the changing external reporting environment and stakeholder demands for better performance disclosure across multiple dimensions.
The biggest change to the framework is the addition of Technology and Analytics domains. While the previous framework covered the technological domain, the rapid advancement of technology and the deployment of advanced analytics required a complete rethinking.
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This domain now includes the competencies needed to manage technology and analyze data to improve organizational success. Take a holistic view of data and include competencies related to data acquisition, data analysis, and presentation of that analysis, all while ensuring data integrity and security.
Management accountants must learn new competencies in this area to be successful. They must be able to extract and analyze the vast amount of information available while becoming familiar with the latest data management methods, queries, analytics and visualization. Combining knowledge of technology with strategic and leadership skills will enable finance and accounting professionals to understand and tell the stories that data tells.
Included in the previous framework as Operations, this domain has been expanded to include the competencies required to contribute as a cross-functional business partner, helping to transform operations throughout the company. While understanding organizational operations remains a critical competency for management accountants, the scope of this domain has expanded.
In keeping with the advanced technological environment, management accountants must understand the impact of technology on business risks, processes and models. This includes how current and expected technology will affect the way business is conducted and measured. Management accountants must be able to evaluate results in the appropriate context by “asking” large amounts of data the right questions to make business decisions and make decisions and gain better insight into overall business performance.
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Leadership encompasses the competencies needed to collaborate with others and inspire teams to achieve organizational goals. Its position as the only intact domain reflects the importance of this competency for management accountants. The ability to be an effective leader, both in the finance function and in the organization, will be an increasingly important competency as management accountants aspire to become business partners in larger organizations.
The main change in the framework is the addition of the Ethics and Professional Values domain. While professional ethics was included in the previous framework as part of the decision-making domain, the addition of this domain in the new framework recognizes the importance of professional ethics and values for management accounting practice. The presentation of this domain in Exhibit 2 highlights the importance of competence in this area. Professional ethics and values must underpin and permeate everything that finance and accounting professionals do, and their importance will only increase.
What is the content of this domain? First, it includes ability
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