Accounting – Least difficult skill to recruit!

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The Financial Times did a survey regarding MBA programs to determine what skills are difficult to recruit and what are not.

Accounting was labelled as one of the least difficult to recruit.  Do you know why?  The actual skill of accounting, booking entries, creating reports, and tracking KPI’s can be done by any CPA or even none CPA.

Does this mean people shouldn’t investigate accounting as a profession?  OF COURSE NOT!

Do you know what the most difficult skills are?

·         Ability to influence

·         Strategic Thinking

·         Big Data Analysis (Insight)

This is where accountants and finance people can really shine if they build on those skills.  All the big data analysis in the world will not help a company if the Finance team cannot provide insight into what the data is saying. 

These insights are not just in hindsight but can help direct and influence where the company goes forward.  This is what will separate you from the masses and get you a seat at the table either in your company or in your division.

If you would like to see the Financial times article, follow the link below.

https://www.ft.com/content/64b19e8e-aaa5-11e8-89a1-e5de165fa619

 

Cheers,

Ken

Have your first sale then hire a finance person!

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Have you watched Shark Tank or Dragons Den?  The entrepreneurs that come on the show are sometimes inspirational and other times, down right sad.

I have lost count how many times a person with a business get in front of the Sharks and has no idea what their numbers are.  They all believe that they have a great business and they just need the connections provided by the Sharks to make it a big success.

A sale starts a business, but the finance function keeps it growing healthy.  Without knowing your margins, costs to acquire customers, lifetime value of customers and other metrics, how do you know if you are making the right sale for your company?

Successful business owners and sales staff work closely with their finance counterparts to provide insights into what the market is doing and where the business is going.  In turn the finance team provides insights into what sales and promotions will give the business a solid financial foundation.

I love when the Sharks ask a business owner, what their numbers are, and they don’t know.  The Sharks come right out and tell them to get themselves a finance person or CFO so they can truly know the value of the company.

Most companies that have get a deal have a combination of things but they first two are:

1)      Sales

2)      Financial Metrics

Unlike the dotcom era, most businesses cannot build something and try to figure out how to monetize it profitably later.  Remember the old mantra that still rings true today, cash is king!

Is Finance Broken?

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The Finance Function similar to business in general is always changing.  It is evolving from a strictly paper reporting structure to a partner function that allows for more involvement and input.  Change is the nature of business and will continue to be for the foreseeable future.  Being able to change and adapt does not mean the current finance system is broken, it means it is well positioned for the future.  A lot of the finance functions that are described as broken are not really, they just tend to be large finance functions within large companies that have not adopted to “Big Data” or more efficient ERP systems, automated AR/AP and possibly offshoring.  Even then I would not describe them as broken but systems with challenges.

 

Determine what the data is for

 

Finance information comes in all shapes and forms.  If your goal as a finance function is to complete month end financial statements, produce a good P&L and move on, then you don’t need a lot of data.  The trouble comes when Sales asks what are their costs related to specific customers or lines of business, what do you do?  You need to set up cost centres that will pull in the information on a daily basis that can be dissected for sales needs.  If you are a manufacturing facility you will need to understand data at lower levels than financial statements, you will need to understand what’s driving your costs at the plant level to have the ability to make changes within the facility to drive cost savings.  You need to ensure as a company that you know what data you need and how to get this data before it can become applicable to your stakeholders.  This doesn’t mean it is broken, it just means a path needs to be created.

 

Is your system capable

 

Part of the evolution of the Finance function is the capability of the system you are using.  As a business grows you must ensure your system adapts with you to get the information you want.  You may move from a QuickBooks to a Sage or a Microsoft Dynamics to allow for more functionality and data.  This doesn’t mean anything is broken, it is the nature of business to evolve and change.  Almost any good small business finance system will provide you with the consolidation and financial statements you require.  What you must determine is what else do you want from your system?  Do you need a robust inventory tracking system?  Is your system able to track sales data by sku or product line?  Some of these changes will make consolidation and financial statements a little more work until your process is in place but provides greater value to the business.  This is the change that you want within your business, but it is not broken.

 

I encourage you as Finance/Accounting people to ask your company about the path that Finance is on.  Ask about the changes or evolution of the function over the next three to five years.  Ask what type of differences they are trying to make within the business to help drive the business forward.  Get an understanding about where it’s going and how you can help.  Don’t ever believe that the department is broken because of changes coming.  This will be a normal part of business going forward, change is inevitable. 

Using Recruiters for Promotion

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I will start by saying I have worked with a variety of recruiters over the years with varying degree of success.  The last recruiter did help me land my next promotion and this is how I would recommend you work with a recruiter to try and land your own promotion.

Resumes are Subjective

The truth is that I have had my resume re-done twice by two different recruiters in the same office for the same job and neither one worked.  On another occasion I put in my resume without any changes recommended by the recruiter and was selected for an interview.  I have also identified that the recruiter wants to put you into a role that is like what you are already doing.  This is fine if you love that role and are changing positions because you want to leave one company for another.  What if, you want to take your role to the next level?  Then you need to tailor your resume to the job you want vs the job you had.

Recruiter’s are Paid by Companies

Recruiters will only be paid when they place someone with a company.  Trying to sell a company on putting a person in a role that they have never done before is very difficult.  For this to happen you need a company to be looking for your specific skills and your skills to be highlighted in a way that makes them want to meet with you.  If your resume looks like every other financial analyst on the market how do you expect a recruiter to sell you at a higher level? 

Give the Recruiter a Chance

When you are looking to take on a higher-level position you need to think like a business and determine your niche.  What can you do that will provide better value than the average finance person? Whether you are a specialist in costing, financial controls, internal audit, process improvement, etc.  This is what must be highlighted on your resume and similar profiles like LinkedIn.  This may significantly slim the number of companies that will look at you, but you should be getting in front of the right companies now.  If you Niche yourself, you are providing the recruiter the right information for them to feel comfortable putting you in front of prospective companies. 

 

Doing all the steps above will not guarantee you a promotion just because you would like one.  However, it will begin to separate you from the large pack of analysts and accountants in business who don’t know how to differentiate themselves.  Why not stand out, create your niche and be the best at it!

 

Building Raving Fans in Your Company

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Give more than your asked

 

When a business partner asks for your help or just a report, start by asking questions.  What is the goal of the report?  Can you provide some context on how it will be utilized?  Sometimes when your business partners ask for something they aren’t requesting what they really need.  If this is the case explain to them what you can provide that will give them greater clarity for what they are trying to achieve.  This will make their job easier and you build credibility with the business.

 

Timeliness

 

I have worked in companies where every email is of high importance and an emergency.  When special reports or information is requested, be sure to ask when it is required.  Be straight forward and let them know you have other priorities as well.  Then always deliver earlier if possible but definitely not later.  When you are consistent with your delivery times, your customers will give you accurate times they need their reports as they know they can count on you to deliver.

 

Presentation Counts

 

I’m never one who is great with presentation.  I sometimes think everyone should be able to follow my worksheets and come to the same conclusion.  This thought process could set me up for failure.  What I like to do is provide a summary sheet that gives the relevant information that the business partner is looking for.  I will attach the support documents in case they want to review something but generally they don’t.  Be sure to provide them a clean concise summary that gives only pertinent information.  I believe the summary sheet should be something small that can easily be read within an email on someone’s phone.  Don’t believe that your business partner is at their desk on their laptop reading your information.  It needs to be direct, snack size and easily digestible.

 

When you create raving fans within your company it reflects great on you and on the finance division.  When Senior Finance Leaders hear back from other areas of the business about your great work it will put you on their radar and enhance your visibility within the company.  Practice the three steps above to create raving fans.  If you do these items consistently you can create habits that will take your career to the next level. 

Ability to Influence your Business Partner

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Influence is important when working in any organisation.  What is influence with your business partners?  Influence is to guide or assist your business partner in decision making.  It is not the ability to pull the wool over their eyes or have them take your position versus a better outcome for the business.

Influence comes with trust!

When you start a new role or with a new company, ask to have a seat at the table.  Let them know that nearly everything affects finance and you want to be in the know with the area you are supporting so there are no surprises.  You even can tell them upfront that you may not have much to add in the beginning as you are learning the business but if you feel something is important you will bring it up.

Deep listening is the first process you need to be able to influence.  Not only do you need to hear what is being said, but you also need to understand what isn’t being said.  Get curious, ask questions.  I cannot tell you how many questions I have asked that made people at the table chuckle because for them it was obvious but for me it helps connect the dots.  Your business partners will appreciate this as true business partners understand that building influence comes with trust, trust comes from interaction.

Building trust and influence occurs when you deliver what you say you’re going to deliver along with delivering results for questions not yet asked.  When you put together a financial exhibit or document, ask yourself, what is this telling the business? How is this helping the business?  What do I want this exhibit to articulate in words?

Your actions will build influence much faster and with greater depth than just words.  Using words to try and build influence is useless, as some say talk is cheap.  As you consistently deliver results and can communicate the business impact, you will build influence. 

Once this influence is built, you can use it when you are sitting at the table you asked to join.  Being able to help the team understand financial impacts of actions prior to acting will build trust across the team and organisation.  Your business partner knowing an approximate outcome before implementing a decision gives them the ability to not be surprised and feel confident.

Influence is key to helping your grow in an organisation because the business needs partners not just people who generate data. Being curious, asking questions, and deep listening will help you speed up the influence timeframe and remember influence = trust.

Don't Surprise your Business Partner

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Don’t Surprise your Business Partner

Sometimes things don’t always go as planned.  A hiccup occurs in the business, an unexpected downturn, or the ROI on a project isn’t going to be achieved.  In any of these cases you don’t want to communicate surprising insights out to the business without your business partner having prior knowledge.

Communicating out surprising or unexpected news can cause damage to the reputation of your business partner and the business.  The negativity of this outcome can be multiplied if your business partner is caught off guard about the communication.

When you have information outside of the norm for your business you will want to discuss it with your business partner right away.  Together you will work towards a common message that will be communicated out and the timing of that message.  Being on the same page as your business partner increases the trust factor and improves your relationship.

Great business partners understand the need for business information both good and bad to be received by the rest of the business.  Ensuring that Finance and your business partner are communicating the same accurate message is key.

Promotion from Analyst to Senior Analyst

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Get Promoted from Analyst to Senior Analyst

 

When you start your career in private industry one of the area’s you want to focus on is that first promotion.  How do you get promoted from Analyst to Senior Analyst?  Some of you might think it takes time to move from one level to the next and it does, but for some it will be eight months and other’s two years. 

One of the reasons’ you want to focus on the first promotion is due to the fact, this is how you make more money within industry.  If you are waiting for the yearly 3% raise from your company then you will never make a great income.  If you truly want to increase your earnings, then you must work for promotions not increases.

As an approximate overview below are the differences between the roles and you can focus on what you need to do to move up a level.

Analyst

·         Generate reporting either weekly or monthly for the business to use.  You will need to ensure the reports are accurate and complete. 

·         Produce month end journal entries and be able to explain your journal entry purpose.

·         Managing expectations of your Supervisor and customers to ensure they are aware the timeliness they will receive their reports and any ad hoc work.

·         Communications skills – be able to provide clear business communications

·         Ability to build relationships among the other business areas

Senior Analyst

·         Generate reports along with commentary about variances within the reports and key drivers

·         Produce journal entries with the ability to understand how your entries will impact the balance sheet or P&L statement

·         Budgeting – work with your business partners to build budgets and understand budget key drivers

·         Continuing to build strong relationships with your business partners, working towards becoming a key contributor to decision making

·         Manage expectations with Senior Management and communicate complex financial concepts clearly with senior leadership

This list is not 100% comprehensive but if you can complete most of the items on this list you will fast track your way to that first promotion and more money.

Be an Effective Controller

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The Role of the Controller

Why is it when you Google the role of the Controller it only reveals that hard skills that a Controller completes?  Quite honestly skills anybody with a goal of reaching that level could build up and hone over time to become a Controller.

As a Financial Controller you will always be expected to provide accuracy of the numbers and trial balance.  Governance and controls will continue to be at the forefront of your role.  These are the skills you build throughout your career and continue to build on until the day you retire.

Yet, all finance people work on these skills through a variety of roles within their career but not all of them become Controllers.  Why not?

It is the soft skills or also known as the business skills that make the difference.  Communication is key, you need to communicate clearly and concisely what the numbers are telling us.  You need to be able to tell the story of the business and support it with what the numbers reflect.  Beyond telling the high-level story, you also need to describe the drivers that are moving the numbers in the direction they are going.

Understanding the drivers will move you from just an accounting commentator to the role of business partner.  When you understand the drivers, you will be able to make recommendations to the business on aspects that could help change its trajectory or increase its trajectory if the current course is where you want to be.

As a business partner you open of the communication between you and the business that allows you to act with questioning the business and what is going on.  You want to be able to challenge and support decision making as a part of the key team. 

The role of the controller is so much more than just transactions and reports.  The role of the controller is to be a fully well-rounded individual in all aspects of the business and to be a relied upon, important resource.

Week 2 - Plant Controller

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Week 2 – Walking the Floor

 

After getting my feet wet the first week, I jumped in the second week getting onto the “shop” floor so to speak.  Part of the activities in the first week was to make myself known to the groups of people working for the company, both management and non-management.

Prior to my arrival with the company, finance only resided at the head office and when it showed up to the facility it stayed in the offices and kept to themselves apart from some plant management.  Therefore, I wanted to hit the shop floor and follow up on my 1st weeks introduction.

Being on the floor allows me the opportunity to truly learn the business.  I work on the assumption that each person working their position is the expert and I can learn from them.  The first time I walk the floor I go out without a notebook, cell phone, or anything that could distract me.  I want to be fully present when I’m on the floor for both safety reasons and relationship building.

This was a fun exercise for myself as I got to get a hands on feel of the facility and the people.  It allowed me to also get a better picture of the process and an understanding of the flow.  This helps when there are issues within the plant that drive a financial impact, I can see in my head almost exactly what they are talking about or where in the process the issue is.

An unintended benefit of this walking the floor came from one of the Operational VP’s who noticed and highlighted that he hadn’t seen finance do this prior to my showing up.  Within a couple of days of this comment I was then asked if I could come consult with his team on a couple of items that they were doing but thought there might be opportunity for improvement.  The walking the floor exercise was now building more relationships beyond the people on the floor which is an added bonus.

As week 2 comes to a wrap I’m finding things going fairly smoothly.  If I had a checklist I would mark off relationship building with a big green checkmark.  Relationship building is never completed but for starting a new position it is off to a wonderful start.  I also would check off some basics as getting an understanding of where the financial data is and what we are trying to do with it.  Also, I am glad the I’m aligned with my direct reporting structure of what is needed, and it is supported by my Operations dotted line reporting structure.

Week 3, here I come!

Week 1 - Plant Controller

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I was nervous coming in for my first day.  Anytime you leave a company that has rated you as a consistent high performer and taken care of your monetary needs with a respectable salary is difficult to leave.  Added to that is the almost seven years I spent there building relationships, change from that is always nerve racking.

Basically, when you leave a solid position you are betting on yourself.  There is plenty of risk with the change in company and with the change in industry that I made.  I transitioned into the Medical Marijuana industry which is trying to transition from a start-up into a large-scale company in one jump.

Like all finance people I opted to evaluate the opportunity along with the downside risk to my family and I, obviously I felt the opportunity out weighed the risk as I took the jump.

Landing in the new place, what do you do on day one.  I came in and began to introduce myself to the team.  There is a team in place and my goal is to understand how the team works.  Each business has a high-level way it functions and then as you begin to learn that you will begin to learn how the people within the team work.

The last item on my list during the first week was to determine what is the number one goal or pain point that my boss needed me to start addressing right away.  It turned out that both my boss and the VP of Operations had the exact same pain point, and both expressed to me at different times.  This made my job easier, as soon as I started receiving access to all the different drives, systems, software and SharePoint, I was able to prioritize and refine what I was looking for right up front.

At the end of week one I’m still excited about the challenge.  I can see what needs to be done but the difficulty comes from not have the exact tools or information to make it happen.  This is directly because the business is going from a small business to a large business.  When the business is small, the breakdown of the information to lower levels is not as necessary because you have your finger on the pulse.  As it grows, you must put in controls and changes to the way the information is handled to drive better decisions making.  That is where I’m at today.  Trying to change the culture from a small business to a detailed large business to improve decision making since everybody cannot track everything at this time.  Time will tell.

Know Your Client - Finance & Accounting

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Financial advisors are required to know their clients to build investment portfolios for them.  This is not a nice to have but an actual legal requirement.  They must understand the risk tolerance, investment knowledge and financial position.

How does this relate to Accounting and Finance people?  We are all serving clients.  If you think that knowing your client is only for finance people in public practice but that couldn’t be further from the truth.  Everyone is serving someone within their role.  Some finance people are serving other finance functions, some are serving business support services, and some are partnering with the revenue generators of the business.

You need to know who your customer is.  Next you need to know their financial knowledge and what they are trying to attain.  If you are sitting behind the computer and pumping out reports that are irrelevant to your customer but mean something only to you, you are not providing value. 

You want to ensure you know what your customer wants and how you are going to be able to provide what they want.  You also want to know how changes in their business will impact the output of what you are providing.

Understand the business and your client to recommend investments that will change their bottom line.  This could be recommending IT changes, equipment changes, adding shifts or paying overtime, and many more.

Knowing your client and having a relationship is imperative to being successful.  It is not impossible but definitely more difficult to provide value if you haven’t built a relationship where you know your client.  If you haven’t started yet, start today, know your client and begin to build value.

Value Add vs Non-Value Add Finance Work

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Here in lies the problem with the term value add?  What is the definition?  For one person a gap identified by the finance team that leads to increased or recovered revenue may be value add if it is beyond the regular scope of their duties.  For another person this is something finance should identify even though it is a plus, it is considered within regular duties.

What I have seen with most finance teams in corporate North America is that they are working their butts off.  As an employee there is nothing worse than putting in excess hours every week just to be told that the work you are doing is not adding value.

Unless you are sitting in your cubicle all day pumping out reports that nobody is reading just because it was always done that way, you are likely providing value.  When your customer within the business is engaged in your reports, using your reports to drive decisions and asking you for, about and regarding your information, it should tell you that you are providing value.

When you sit down in your position with finance and are asked to start producing reports, don’t be afraid to ask what they are for.  Find out what the purpose of the report is, how the report is utilized and the benefits driven from the report.  If nobody can answer these questions than it is likely the reports are not value add.

Value add is building relationships with your customers, understanding their needs from a customer perspective, understanding what they are trying to achieve and then delivering it with data and analytics.  If you are doing these few things, you can feel rest assured that you are providing data.

 

Cheers,

Ken Lane

Career Paths – Not Always Straight Forward

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My finance accounting career started by accident.  What does that mean?  My wife applied to an entry level accounting job in manufacturing on my behalf when I was working as a Personal Banker selling mortgages, lines of credit and investments.  My background is in Computer Science and sure enough I ended up in finance.

I had talked about working in finance accounting, really, how difference could accounting be, I’m looking at personal income statements all the time.  I couldn’t be more wrong.

Needless to say, I receive a call one day and get asked to come down for an interview.  I received the first job because of my ability to communicate and build relationships.  Even in the interviews I was able to build small relationships that pushed me ahead of others who had studied accounting and were working towards their CPA.

What do you do when you get a job that you are most likely under qualified for?  You put your head down and you work.  I worked hard to figure out the business, the pain points for my customers, and communicate with them.  I delivered good news and bad news the same way, with understanding of how it impacted them and the reasons behind the news.

After gaining my experience I moved into the Internal Audit department in the same company.  How?  Hard work and business understanding.  When you work in audit, you need to be able to understand the business, what you’re reviewing and how everything ties together.

Less than two years into this role, I moved into Internal Audit of a multibillion dollar international real estate company and reported to the VP of Audit and Compliance.  I still had no accounting designation, but I put my head down and did the work. 

I think getting a CPA is fantastic and well worth it, yet if you can’t build the relationships in business and communicate, all that hard work will never materialize into its full value.

Unfortunately they decided to move my department from Toronto, Canada to New York City and I was out of a job.  I decided at this time to move backwards in my career due to having kids.  I went back to a Financial Analyst job so I could be home at night.

This job was fantastic because I could do the job with ease but more due to the fact it had tremendous leaders that I could learn from.  I was able to learn about the business in a larger context than what I was used too.  I was able to build better relationships with the business and truly partner with them.  I earned a seat at the table of everything and my opinion was respected because I understood the business not just finance. 

Now I’ve moved back up and I am a Controller.  I’m working on building the next set of leaders and I want these men and women to surpass me.  I realize that I don’t want to be a CFO, therefore I’m not going to grind out everything I need to be a CFO but that’s good.  That’s my path.

Realize that you may not always have a career directory straight up the ladder, sometimes you will stall, sometimes you may move back down, but at the end of the day you will succeed.  Remember that your path is individual to you, the timeframe is individual to you, have patience, grind it out and you will finish at the top of the game.

Value Add Finance is the Analyst plus Business Knowledge

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If you want to be an individual that pumps out reports all days, ensures numbers are accurate and fill people’s emails with KPI information, then be a Financial Analyst with a company using a narrow view finance approach.

In turn, if you want to add value as a finance person and truly partner with the business, then use the same information and understand what it means to the business. 

As information technology advances the need to have a narrow view finance approach will become non-existent as new systems and artificial intelligence will generate the reports.  It will be able to highlight information that doesn’t align or said differently, “highlight garbage in and garbage out”.

What businesses truly want are the Financial Analysts that work in the business.  They want people who come in and understand the market that they are playing in.  How does the business make money?  What the KPI’s are saying about the business and what is the underlying drivers from within the KPI’s.

They want to hear ideas on what can be done to improve the KPI’s and the financial results.  Nobody is expecting the Financial Analyst to have all the answers but to have thoughts and ideas to suggest.  The Financial Analyst should want and have a seat at the table for all meetings involving the leaders of the business.  This allows them to understand what the business leaders are currently thinking and can provide thoughts regarding financial impact of ideas.

Your degree has enabled you to understand finance and accounting in the broadest sense, now you need to take those skills and become a value add finance partner to the business.

5 Skills you need to Add Value in Finance

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1)      Finance Basics – To add value you need to become an expert in the basics of finance (Budgeting, Planning, and Forecasting). You should spend time in various areas of finance such as accounting, external reporting, treasury and operations finance.  As a financial expert, you should be able to help your business partners understand the financial impacts of their decisions.

 

2)      Understand the Business: As an add value leader in finance, you cannot work in the silos of finance and accounting.  You need to understand how the business works, so you ca influence strategic business decision-making through analytics and decision impact.  For this, you should spend time in various departments in the business-whether assuming a role in the business yourself or taking on various operational finance roles.  You should understand the company’s customers (internal/external) and take every opportunity to visit various locations, meet with the customers, and spend time with marketing and sales. 
 

3)      Influence beyond Finance: To be an add value finance leader, you need to reach out and work across functions and departments.  Business cannot make any strategic decisions without understanding its financial impacts and weighing the risks.  To be a finance leader, you need to learn how to communicate the story that numbers are telling, and use your influencing skills to lead to better educated business decisions.

 

4)      Be Agile: Change is one of the most common words and consistently occurring in business today.  This change can be brought by internal re-organizations or shifts in the marketplace, or new products brought to market.  To be successful in finance today, you need to be agile and develop it as one of your strengths, to not only survive change, but also to thrive, develop and provide guidance in changing environments.  You want to be recognized as an individual that can support change and help other groups with the impact of financial department changes.

 

5)      Be a People Leader: People are the most important asset in any function.  A finance function may have the latest systems, the most reliable data sources and defined processes, but if it does not have the right people managing the systems, analyzing the data or executing the processes, the finance function will not perform well.  To be a finance leader, you need to be able to attract, hire, develop, and retain a highly skilled team of finance professionals that includes a good balance of people.