Going back to 50s and early 60s the finance function was looked after by just an ‘Accountant’ or ‘Accounts Officer’ reporting to Production chief or Works Manager. His job was only to put in proper order financial data or so called ‘Accounts’ then. His main job for the fiscal year was to file Income Tax returns of the Company in a legally Tax saving way.
From then an Accountant with a little more importance was transformed to Accounts officer, then to Finance Officer. As a Finance officer he was supposed to play an innovative role in cost savings. In the mid 80s he was given a ‘Manager’ designation and was treated on level with other functional heads.
In the late 90s the transformation was from FM to CFO and now with more authority and contribution even to CEO.
Organizations today look for competencies rather than the qualifications of potential employees. Organizations generally look for core skills and competencies that a role demands in individuals rather than a specific degree. If however, the role you are seeking to play in a firm requires you to have knowledge and skills beyond what a management accounting qualification provides, then you may want to add another suitable qualification to your resume.
Unlike traditional accountants who focus on maintaining a record of past financial issues, management accountants essentially assess future business possibility of business houses. They grasp opportunities and shape the future of organizations. Typical roles in an organization, which a management accountants start with include budgeting cost control, risk assessment, forecasting (including statistical analysis and projections) and project management. If you wish to be a chartered accountant and practice in India, you need to acquire the CA, qualification offered by ICAI. To set up independent practice as a cost /management accountant in India, you need an Institute of Cost and Works Accountants on India (ICWAI) memberships.
As mentioned earlier, you need to be a member of the ICWAI to practice as a cost /management accountant in India. Other international qualifications in management accounting may help you gain a global perspective of business which in turn may aid you in acquiring and supporting multinational clients in your practice.
To succeed in any area of business or profession today, one needs to have a strong understanding of the current business environment and its needs. Whatever skills or knowledge you possess must be relevant to today’s business needs. The application of your skills in solving business issues and the ability to analyze management information and transform it into business objectives and decision are crucial to lead you towards becoming a good management accountant.
Companies are constantly evaluating if they have the right individual leading the finance function, keeping in mind not only the current business operations but, more important, the fitment with the future growth strategy. The CEOs ensure that they are supported by business-oriented CFOs who can be their sounding board, conscience keepers and have the toughness to express their point of view.
For the CFO to build strong credibility for the finance function and be accepted as a part of the think tank, he has to be well versed with the key operating levers of the business and at the same time be conversant with best-in-class accounting practices and procedures. A company looking to build a strong image in the external environment, especially with investors, business partners and customers, having the right person leading the CFO function is absolutely a critical decision.
In fact, private equity companies are always on the lookout for CFOs who have the right balance between operational competence and strategic mindset to advise their investee companies on how to efficiently run the business.
Even prospective employees take a closer look at the caliber of talent existing in the company before they take the decision to join the company. Therefore, having a highly competent CFO could be a key pull factor for attracting and retaining the best talent.
We also see this through a larger proportion of CFOs becoming CEOs today because of their 360-degree view of the business and involvement in a number of defining initiatives that the company undertakes.
The influence finance professionals have in large Indian groups is best demonstrated by the large portfolio of responsibilities being led by Amitabh Jhunjhunwala at Reliance Dhirubhai Ambani Group and Girish Paranjpe at Wipro.
In organizations where the CFO’s function is isolated and there is limited interaction with other functions, it becomes a major bottleneck in running the organization and can ultimately destroy the institution. It is essential that the CFO positions himself as a solution provider and an organization builder.
In summary, the CFO’s responsibility has grown exponentially more complex. The contemporary job description includes the ability to act as a strategic partner to the CEO, serve on the board and play a crucial role in presenting the public face of the company to investors, regulators and policy makers. The CFO is also expected to change business processes to deliver improvements in performance. In addition, more sophisticated financial markets, vastly increased organizational size and complexity brought in by globalization, changes in technology and greater focus on governance, risk and compliance mean that the CFO needs to be a highly skilled leader. This evolved role of a CFO within an organization presents unparalleled opportunities for today’s finance professionals as demand far outstrips supply.