CFO

Special Report

How to Buy HR Technology



accountants need to show their softer side

new hires: a skills-anddemand balancing act non-u.s. cfos donning green eyeshades

accounting for accounting skills

CFOs seek new finance and accounting hires who can communicate as well as compute.
by kathleen hoffelder

accounting for accounting skills If people are frustrated with the controller, its not that the controller isnt working until 8 p.m. or attending to details, its because he perhaps doesnt communicate well, says Ware Grove, CFO of CBIZ, a finance and accounting advisory affiliated with its public accounting arm Mayer Hoffman McCann. Too often staff accountants, general ledger accountants, and other finance personnel have heard the same criticism.
Communication skills and the ability to see through the trees of more mundane finance and accounting tasks to the forest of broad corporate objectives is a characteristic not typically associated with accounting and finance staff, a new CFO.com survey shows. Of the 422 responses from CFOs, controllers and senior finance executives polled in March, almost 60 percent either flagged communication or big picture thinking as the most lacking skills among their staff. Softer skills, like being able to communicate well, lead their teams and relate to other business units are not just reserved for management anymore. The majority (65 percent) of those finance chiefs and other senior executives polled in the CFO.com survey said they consider thinking strategically to be important at both the higher levels of accounting and finance staffing and at the lower levels. If accounting and finance staff dont start thinking more outside of the box, it could be to the detriment of their units and their firms. Some CFOs are leading the charge in recognizing the other skill sets with training programs, enhanced opportunities to work with different business units and encouraging outside education. But clearly more work needs to be done experienced staff still fall down sharply in leadership abilities while new recruits often think they should be the CFO without any of the experience. In the following articles, CFO.com investigates what skills are needed most in accounting and finance now and in the years to come. And some of the findings contrast markedly to CFOs abroad.

If accounting and finance staff dont start thinking more outside of the box, it could be to the detriment of their units and their firms.

Accountants Need to Show Their Softer Side

Almost 60 percent of CFOs, controllers, and senior finance executives said communication skills and the ability to focus on a corporations goals were lacking among finance and accounting staff, says a new CFO.com survey. When staff accountants become company experts in something as challenging as cost accounting, they are able to advance to a reasonably high place in a corporation. But reaching senior management levels typically involve the development of a broader sense of the companys business. The divide between skills typically as-

CFO Special Report | accounting for accounting skills

accounting for accounting skills

What skill is most lacking in todays finance and accounting professionals? Communicating with other groups tied for first place among the respondents with thinking about the companys goals and focus as a whole.

sociated with accounting and finance staff and those that typify upper management seems to be growing deeper, the result of a March CFO.com survey of 422 public and private CFOs, controllers, chief accountants and other senior finance executives suggests. The results show that todays accounting and finance staffs have more than enough data skills. But they often lack the ability to wade through the numbers successfully to communicate with senior management, according to the respondents, who represent U.S. corporations with sales of between $50 million to over $1 billion. What skill is most lacking in todays finance and accounting professionals? Communicating with other groups tied for first place among the respondents with thinking about the companys goals and focus as a whole. Each answer drew a 29 percent response rate, followed by 25 percent who said displaying abilities to take charge of situations, 9 percent who chose applying IT skills, and 8 percent who said traditional finance understanding. (See Figure 1.)

As one respondent pointed out, more effective communication skills should help accountants advance to higher levels in a firm. The ability to communicate across all functional areas is critical to both the finance/accounting professional and the organization. Without good communication the finance/accounting professionals ability to positively influence the strategic direction of the company will be limited, notes a controller at a small auto concern. Ware Grove, CFO of CBIZ, a finance and accounting advisory affiliated with Mayer Hoffman McCann, the firms public accounting arm, concurs. Accountants struggle verbally in presentations and in writing, he says, a shortfall that can hold them back from rising into senior management. The people that rise to the positions of senior team leadership or controllership typically have those skills. Focusing on data is a typical quality of most accountants, from entry level on up, says Grove. But they often underestimate the importance of softer skills like effective communication. If
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accounting for accounting skills

Accountants and finance staff are really good crunching the numbers and coming up with the right data but they lack the ability to communicate orally and in written reports, he says. When Im looking for new help Im looking for people that have those skills.

people are frustrated with the controller, its not that the controller isnt working until 8 p.m. or attending to details, its because he perhaps doesnt communicate well, he says. Some of that comes with the territory. Finance and accounting jobs in general require a lot of precision, accuracy and technical knowledge, which is not so easily communicated to otherseven within the same team. According to Grove, its easier for an accountant or a member of the finance staff to just do a complicated task than to stop to explain it to someone else. Even though teaching someone else to do the task is an investment in the future, he says, sometimes accountants are reluctant to do that. But good communication can pay off. Thats especially true in finance and accounting units within more people-focused industries like entertainment. Jim Blake, CFO, vice pres-

ident and treasurer of Moreys Piers, owner of an entertainment complex based in Wildwood, New Jersey, finds that accountants and finance staff are really good crunching the numbers and coming up with the right data but they lack the ability to communicate orally and in written reports, he says. When Im looking for new help Im looking for people that have those skills. Even in more industrial fields, however, its important to have finance and accounting units communicate better with the rest of the organization. Theres so much data thrown at people today that one of the things weve been trying to have people focus on is communications, says Brian Valentine, CFO and corporate vice president of The Lubrizol Corporation, a specialty chemicals company and wholly-owned subsidiary of Berkshire Hathaway based in Wickliffe, Ohio.

accounting for accounting skills

Such big picture thinking is precisely what the CFO of a small non-profit firm who took the CFO.com survey noted. Often times accountants go through the motions without having a clear understanding on why theyre doing something and how what they do impacts others within financial services and the organization as a whole. Similarly, as one vice president of accounting at a $1 billion telecommunications company said, finance and accounting professionals need to be able to look at the numbers and ask why as opposed to simply calculating results and putting them on spreadsheets or PowerPoint presentations. Indeed, thinking strategically was cited by 65% of the respondents in the CFO.com survey as important at the higher levels and at the lower levels of accounting and finance positions. In contrast, 33% said thinking strategically was important at the higher levels, not necessarily at the lower levels. (See Figure 2.) As Lubrizols Valentine notes, the base accounting and finance technical skills are a given and something that we really want to ensure people have as they come into the fold. But its people that can step back and understand the big picture that the company is looking to hire. To him, therefore, its crucial that finance and accounting staff partner with Lubrizols business units to understand the strategies driving the company and be able to bring a global perspective to their jobs. Lubrizol, which has more than half of its busi-

Often times accountants go through the motions without having a clear understanding on why theyre doing something and how what they do impacts others within financial services and the organization as a whole.

Lubrizol seeks to deepen the skills of its finance staff via a training program that rotates finance staff among different accounting positions every three years. But Valentine also says the training tries to broaden the perspectives of the group by introducing such values as focusing on the customer. The rotation could take trainees to a number of different places once they are done with this program, he reasons.

accounting for accounting skills

ness overseas, expects more expansion in Asia, particularly China, where it is building a new facility.

The [accounting]team has traditionally been responsible for closing the books and making entries. I am pushing them to become partners with the business. This is a challenge because they are having to think about business matters more than debits and credit matters.

Partnership is a common theme, one with which the controller of a midsized chemical supplier who took the survey is familiar. The [accounting]team has traditionally been responsible for closing the books and making entries. I am pushing them to become partners with the business. This is a challenge because they are having to think about business matters more than debits and credit matters. If such thinking takes number crunchers all the way up the corporate ladder, thats an outcome with which CBIZs Grove would be comfortable. I want to find people who have some ambition and want to grow. Its fine with me if everyone wants to be the next controller or CFO down the line. But too much strategic thinking and not enough actual doing can be harm-

ful as well. As the senior finance director of a travel and entertainment company that takes in more than $1 billion a year noted, corporations need to be careful that the business is not filled with an over ambitious strategic thinker at every level. After all, someone needs to do the work, he adds. Everything has value. More Talking, Less Crunching So whats the solution? Among the remedies to correct part of the skills void, survey respondents said, more schooling in communication could help. Potential future members of accounting and finance staffs should focus on improving their oral and written communication skills while theyre in college and afterwards in courses yielding Continuing Professional Education (CPE) credits, according to one mid-sized CFO at a private financial services firm. Similarly, a senior vice president of a
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CFO Special Report | accounting for accounting skills

accounting for accounting skills

communication and strategy, added into the mix. More than 80 percent of respondents said they would either agree or somewhat agree with the statement that undergraduate finance and accounting education at U.S. based institutions provides the right skills needed for professionals in those today. That compares well with only 10 percent who said they would disagree and 4% who said they would strongly agree. (See Figure 3.) There was, however, a fair amount of criticism of the current state of finance education. Respondents said that not enough ethics was being taught, that professors lacked practical, hands-on experience and that students werent inquisitive enough. As one controller at a small private manufacturer put it, there is still a focus in the colleges on only what is needed to be successful in a CPA firmwhich is important, but not what drives success at most corporations. LEADING THE CHARGE Ehud Sadan, associate managing partner at Anchin, Block & Anchin, an accounting advisory servicing private corporations, summarizes some of those missing finance and accounting qualities in one word: leadership. In both experienced staff and new hires, he says, we are looking for leadership capabilities as much as we are looking for technical skills. To him, the ability to learn and learn quickly, interpersonal skill, knowing how to solve problems and the ability

As one controller at a small private manufacturer put it, there is still a focus in the colleges on only what is needed to be successful in a CPA firmwhich is important, but not what drives success at most corporations.

1 billion telecom granted that universities teach the basics of accounting and finance. But they do not do a good job of teaching analytical skills, data presentations, the need to create strong relationships, or how to put together data models. Overall, survey respondents did not express much dissatisfaction with the current undergraduate finance and accounting programs of U.S.-based schools and universities. They just want some of the softer skills, like

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accounting for accounting skills

to motivate others can make a good leader out of an accounting and finance professional. We want these people to be able to communicate with business owners in a professional and a correct way. We are looking for all these interpersonal capabilities. Such demands come straight from clients, Sadan says. Over the years our clients expect much more from us. Our clients expect us to be business advisers and look at areas that are not just accounting and tax but personnel, future operations, exit plans, and communication with other family members [as private wealth clients]dealing with challenges that are much beyond the traditional accounting. Leadership qualities were cited in the CFO.com survey by several respondents as a skill that is decidedly lacking among some newer accounting and finance staff. For a senior vice president

offinanceat a$1 billion auto concern who took the survey, that could have dire consequences. The need for leadership skills is only going to increase as the youngest baby boomers approach retirement. The same leadership concerns were found lacking in even the more experienced accounting and finance staff. We still have a large population of tenured professionals who just get the basics done but do not have the curiosity or the passion to dig deeper to identify opportunities and create a compelling case for change, noted an executive vice president of finance ata $1 billion private retail operation.

Over the years our clients expect much more from us. Our clients expect us to be business advisers and look at areas that are not just accounting and tax but personnel, future operations, exit plans, and communication with other family members [as private wealth clients]dealing with challenges that are much beyond the traditional accounting.

New Hires: A Skills-andDemand Balancing Act

A CFO.com survey reveals CFOs and other senior finance and accounting executives are ofen at

CFO Special Report | accounting for accounting skills

accounting for accounting skills

odds with Generation Y staffers expectations on the job. Finding the right mix can help. Generation Y staffers dont typically see eye to eye with their older, more experienced corporate managers. And with a field as technical as finance and accounting, those differences can be detrimental to a firm if left unchecked. Often managements need to have staff stay in an accounting position for at least a year until a role is mastered clashes with new recruits desire to move into different positions quickly. New recruits who have just come out of school may want to switch positions at a quicker pace than what management would like or what the culture is used to, explains Brian Valentine, CFO and corporate vice president of the Lubrizol Corporation, a wholly owned subsidiary of Berkshire Hathaway that manufactures specialty chemicals. A CFO.com survey of 422 CFOs, controllers, finance directors and chief accountants working for companies with sales in the range of $50 million to over $1 billion taken in March backs up that sentiment, revealing that young hires

are often at odds with experienced managers when it comes to how long they stay in a role. As one controller at a mid-sized employee consultancy said in response to a survey question, the students need to stop thinking they will come in and be a controller or CFO. They seem to whine about the grunt work they have to do and how narrow or specific their job may be. They need to understand you have to work your way up and you learn as you go. Another survey respondent who is a senior vice president at a $1 billion technology-parts firm would agree with that commentary. He finds that young recruits are too eager to move to the next thing when they really havent mastered the current role. Rotating out of staff positions at a faster clip, however, is difficult since new hires core financial skills may need some polishing. More than 70 percent of those surveyed said new hires were either mostly unprepared or largely unprepared for core finance and accounting tasks, requiring training from a few weeks to a few

the students need to stop thinking they will come in and be a controller or CFO. They seem to whine about the grunt work they have to do and how narrow or specific their job may be. They need to understand you have to work your way up and you learn as you go.

CFO Special Report | accounting for accounting skills

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With younger people, theres so much text messaging and e-mailing going back and forth, that we want to ensure people still get out of their offices and get to know and build relationships with the people they are working with.

counting also involves some rethinking on the communication front too, adds Lubrizols Valentine. With younger people, theres so much text messaging and e-mailing going back and forth, that we want to ensure people still get out of their offices and get to know and build relationships with the people they are working with. And hiring those candidates involves extra effort on the part of management. When CFOs and other finance executives look to hire young recruits in accounting and finance, they not only have to searchhigh and low for the right skills. They also have to make sure the job is appealing to the candidates themselves, says Mike McNamara, regional director for Accounting Principals, an accounting and finance staffing firm. Such an appeal must extend beyond the job itself. In trying to appeal to a Generation Y candidate, you cant just have a job description. It has to include some technology talk, community activity, and a work/life balance, says McNamara. After they are hired, its also necessary for CFOs and their staffs to make sure the recruits are motivated enough to stay in their jobs. The motivation can often start with how well the workspace is equipped. Since Generation Y staffers typically grew up with mobile technology at their fingertips, they may often crave the latest software installed on their computers or be provided with a portable laptop, he says. Helping younger hires adapt to a particular corporate business culture can

months. That compares with 23 percent who said they only needed basic training and 7 percent who said they were already prepared. (See Figure 1.) Training new hires in finance and ac-

CFO Special Report | accounting for accounting skills

accounting for accounting skills

The motivation can often start with how well the workspace is equipped. Since Generation Y staffers typically grew up with mobile technology at their fingertips, they may often crave the latest software installed on their computers or be provided with a portable laptop.

be a challenge for firms as well as the new hires. Ehud Sadan, associate managing partner at accounting advisory Anchin, Block & Anchin, for one, notes that his firm routinely teaches new accounting and finance staff how to speak with their peers, give good feedback to clients, and prepare reports. And for some, he even goes further: we teach our people how to eat.

their finance staff. But their counterparts in the rest of the world arent giving up on old-fashioned number-crunching just yet. New research from a survey of nearly 500 CFOs based outside of the United States shows that 80% believe its important for newly qualified finance professionals to understand the finance value chain, meaning they should have a breadth of financial understanding across core financial and management-accounting areas, as well as more specialized areas. To be sure, the survey was conducted by the U.K.s Association of Chartered Certified Accountants (ACCA), a trade group with an interest in advancing the profession. Still, the survey, which polled CFOs who work in the United Kingdom, Malaysia, Russia, China, and the United Arab Emirates, provides a clear picture of finance chiefs with sharply differ-

Non-U.S. CFOs Donning Green Eyeshades

The best grounding for new finance professionals with CFO ambitions is a full appreciation of financial and management accounting, new research shows. U.S. CFOs have largely shed their longstanding taint as mere bean counters. Instead they have touted the value of their broad economic and strategic skills and conveyed that message to

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ing views from their U.S. peers. More than half said the most beneficial grounding to help a newly qualified finance professional on the path to being a future leader was a full appreciation of financial and management accounting, according to the report. In contrast, only 17% of those surveyed said a strong strategic focus was a good grounding for the finance professional. A key priority of the finance function continues to be its fiduciary responsibilities because financial control of the organization remains fundamental to creating a platform for sustainable business growth, the report said. That tilt toward the basics of accounting is no surprise to Jamie Lyon, head of the corporate sector at the ACCA. He notes that the recent economic recession may have pulled in the reins on CFOs spending so much of their time fostering company growth and forced them to look more at the financial soundness of the firm and for that matter the tax and regulatory skills of their staff. There has been a little bit of a shift following the economic crisis. Precrisis, there was a lot more focus around growth, says Lyon. As the recession hit, he says, global CFOs began to immediately question, Whats my cash position from day to day? Whats hap-

pening to my costs? Whats happening with my controls? Such anxieties may have triggered a shift back to the basics. The CFO is a key adviser to the strategic (decision makers); thats not in question. But there is a balance to be had in these times. That balance is around cost management and certainly managing risks, says Lyon. Finance as a function has been slightly brought back into focus. CFOs, the report maintains, must balance the pursuit of growth with the appropriate control of the organization, which is needed for long-term wealth creation. CFOs recognize that long-term value cannot be created or sustained unless the business is appropriately controlled, meaning its risks managed effectively, its funds protected and maximized, and its core fiduciary responsibilities met. Finance staff, respondents maintained, need to be well versed in effective cost management, forecasting, strengthening the control environment, ensuring appropriate levels of working capital, and managing risk. Further, understanding the links among all areas of finance would enable new recruits to take their career in any direction they chose, according to another 80% of those surveyed.

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