Why accountants need to know strategic finance
One criticism of the accounting profession is that sometimes, it is too “treefocused” and many would miss “the forest.”
Some tend to just look at numbers as stand-alone, isolated and not integrated to enable a full or total picture of the organization’s financial and operational performance. In other words, it is a lot of data without analysis, evaluation and diagnosis, and most critically, no predictive results—no insights beyond the available numbers, to predict potential scenarios and outcomes.
We asked Dr. Cesar Mansibang, a highly respected account- ing and finance professional, business practitioner and graduate school professor, to give us some thoughts on what accountants need to know, to become more strategic thinkers.
“Some competencies are required to obtain this “financial intelligence” level so that the finance and non-finance managers could ask the right question, identify problems, and solve them in an integrative, systemic and strategic way.” Here are some of them: 1. Understanding the basics of finance, particularly balance sheets, income statements, and cash flows and how the num- bers make up as a whole rather than in isolation.
2. Understanding the dynamics, science and art of the finance discipline as a systemic approach to decision making in a multi-factorial environment.
3. Understanding analytics, their cause-and-effect to identify the roots of the problem and enable sound solutions.
4. Understanding the actual application of the “intelligence” data, the whole story, the big picture and their impact on total company performance and future direction.
5. Understanding finance beyond what is to what could be to enable formulation of strategies for the future based on scenario building. INQ Dr. Mansibang will conduct a course entitled “Strategic and Critical Finance for CPAs” on Aug. 11, 2017 under Inquirer Academy. The course will help strengthen the ‘financial intelligence’ of accountants for them to be effective decision makers. Attendance in the course will allow CPAs to earn CPD units. Inquirer Academy’s Continuing Professional Development program will offer courses for CPAs to develop their technical and professional skills, such as “Exploring and Applying Philippine Auditing Standards”, “Everyday Communication for Accountants” and “Professional Presence for Ac- countants”. The Inquirer Academy is at 4168 Don Chino Roces Ave. corner Ponte St., Makati City. For more information about the workshop or if you would like to add your input on the article, you may email ask@inquireracademy.com, call (632) 834-1557 or 771-2715 and look for Jerald Miguel, or visit the website at www.inquireracademy.com.