Why Accountants Need to Know the Business
by: Patrick | The Constant Analyst
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If you look at what it takes to be CFO or a manager in your department, it likely involves developing skills that your current position will not automatically teach you. If you want to advance you must make a conscious effort to get out from behind your accounting desk and improve your knowledge base.
One of the easiest and most beneficial areas things to learn about is the mechanics, philosophy, and people in your own business. As accountants we have an advantage in that we get to see the figures behind most of the transactions that occur. Unless you are at a very large company, your accounting department likely supports in various ways components of the sales, distribution, manufacturing/procurement, overhead, IT, marketing, HR, and other functions. At minimum your department is keeping records of all the financial impacts of these functions. An accountant is in one of the few non-management roles that as part of their daily job gains knowledge about what goes on throughout the company.
But that is not enough. It’s not enough to know a little bit about what your business does, by just knowing the numbers. If you want to advance, you need to get to know what the other departments in your company actually do, and how they work together. You need to understand the philosophy in which each of these disciplines approaches their jobs. You want to understand your company’s customers and how they think about your company. Understanding all of these things will help you not only do your job better, but prepare you for advancement within the organization.
Why should accountants get to know the business?
- Narrow the gap between the numbers and the business decisions. I’m continually surprised how few people in business catch on to the fact that there are actually quite few people in most companies that understand the financial concepts and systems, yet also understand how these things relate to every day business activities, and more importantly how these things tend to drive business decisions. Many times business managers need help in interpreting results. They need someone to help them take a report and turn it into action. Some organizations are better at this than others, but I believe most report performance very well, yet could improve relaying that performance reporting into action items for business managers. Gaining a business manager’s perspective will help you close that gap.
- Gain context and perspective for the results you report. If you are in any kind of analysis or reporting role, you know that creating reports is not your only job. If you simply create a report and email it out to the business, you are missing an opportunity. As you gain perspective about the business you will find that the way you conduct analysis changes. Instead of projecting results based on history, you might start contemplating larger macro trends already evident to most of the business managers. You might also be able to better challenge the business when they develop goals that are too aggressive. Even the way you report performance might change. Ultimately you start viewing the numbers through a business lens, not just an accounting lens. The report you’ve always done at month-end just because it’s always been done, you might realize has no real business value.
- By learning about others’ job functions, you increase mutual respect.Respect is one of the most important elements to working relationships with your colleagues. If you lose respect for one another, it’s very hard to get anything significant accomplished. Likewise, if you can increase the respect that you have for others and visa versa, you will see working with them becomes a more positive experience. One of the benefits of learning about other’s functions in the business is that you will gain respect for what they do. Chances are they will tell you things that you never would have imaged. Your understanding expands beyond your original misconceptions, and you start gaining more respect for others. They will also gain more respect for you because of the pure fact that you’re taking the time to learn about things outside your own area (especially their function). Not only that, because your questions will of course be intelligent and you will always be attentively listening to everything they tell you, they will learn you are someone with their own drive, not just waiting to follow orders from above.
- More comprehensive understanding of business processes will lead you to identify huge opportunities for improvement. Almost no individual in medium and large sized companies has the knowledge of what happens in a business process from beginning to end. At some larger companies this might exist in process engineers, and other functions, but many companies don’t have those roles. Gaining a detailed understanding of the business gives you the ability to identify areas improvement to management. This adds value to the business directly. In addition, if management perceives you as having detailed understanding of many other areas of the business, you will be one of the first on their mind when it comes to large scale, high profile projects, which are the exact opportunities you need to move to the next level.
- Learning about the business from others will build relationship with them.Networking internally in your company can be just as important to your career (if not more so) than networking externally. Seeking an individual’s time to learn about what they do will give you a starting point to build that relationship. You can make initial connections that would have been impossible to make were you sitting behind your accounting desk. You never know where these connections might lead. You might find that someone who has a hand in your next promotion was the same person you sat with in his or her department just to learn from a year ago.
Realize that companies are not static and their opportunities are not always predictable. If you can position yourself to learn as much as possible about other areas not only can you do your job better today, but you are preparing yourself for the next big opportunity that comes up. You will meet others and gain respect for them, not knowing where those relationships might lead. You will break out of the monotony and learn something while at the same time increasing your job satisfaction.
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