My career in finance and accounting began in 1997 when I landed a job as an Audit Associate with Ernst & Young. In the years since, I’ve worked with three of the ‘Big Four’ accounting firms, as well as Financial Controller and CFO in several industries before removing my accounting hat to take on the role of General Manager.
The expectations of the role of the chief accountant, finance manager, financial controller, finance director and chief financial officer have evolved over the years. The accounting profession is no longer the realm of ‘bean counters’ in dark, dingy offices piled high with papers and over-flowing with adding machine tape. Today’s accounting professional is no longer just an administrator or cost cutter, but a part of the heartbeat of the organization’s success.
More than ever, there is an increasing demand for highly skilled accounting professionals. Today’s finance executive is a key partner in the business, creating value and providing a high return on investment. Top performers expand their repertoire of skills beyond the purely financial to become true leaders within their organization. Unfortunately, weak financial managers still outnumber the excellent ones. Here are ten ways to spot them:
1. Weak finance executives frequently miss deadlines
Ineffective finance managers forget that for financial reports to be effective, they must be provided to decision-makers in a timely manner. The most basic requirements of finance managers are that they have fundamental accounting skills and the ability to provide timely reports by effectively managing the finance department. Strong financial executives work well under pressure to produce timely, reliable and accurate information.
2. Weak finance executives confuse working hard with delivering results
Finance is a demanding field that often requires working long hours. Ineffective finance professionals seem to get addicted to putting in long hours without tying the strenuous effort to tangible goals and visible improvements. Excellent finance managers put in the work required, but become noticeably more efficient over time. They focus on adding value and becoming better at what they do, rather than just burning the midnight oil.
3. Weak finance executives are stuck behind their desks
Have you ever met a chief accountant who lives behind his or her desk? While the finance function crosses all areas of the business, ineffective financial executives are out of touch with the day-to-day happenings of the organization. Failing to understand the importance of having “a finger on the pulse”, ineffective finance managers do not assert themselves as leaders, they fail to expose themselves to the front line, and miss the opportunity to get to know others. As a result, ineffective financial executives find themselves ignored by both colleagues and line staff.
4. Weak finance executives do not have the support of the GM or CEO
Your financial controller might be a poor one if he or she has not developed a strong relationship with the boss. The relationship between a financial executive and the general manager is one of the most critically important to the success of the organization. Skilled finance professionals make it a priority to win the trust of leaders and make sure that there is open and frequent communication.
5. Weak finance executives are poor communicators
Poor financial executives lack well-developed communication skills. They often appear uncomfortable interacting with others and fail to engage effectively with people at all levels of the organization. Skillful financial executives clearly and concisely communicate the financial performance of the company and the availability of resources both orally and in writing. They are also not afraid of delivering bad news and will provide information to bosses and shareholders without having to be asked.
6. Weak finance executives have a limited understanding of the business
Your finance director might be a poor one if he doesn’t have a solid understanding of all aspects of the business. A common red flag of an inept accountant is a failure to grasp critical processes and non-financial drivers in areas such as sales, production or marketing. An effective finance executive will have well-developed commercial skills. He or she will be intimately familiar with functioning of the various cycles in the business, their strengths and weakness, as well as their relative levels of criticality to success.
7. Weak finance executives fail to attract, build and retain effective teams
An excellent finance director is only as good as the team supporting him or her. Many executives fail to remember the importance of attracting the best and the brightest people. They fail to create a nurturing environment which challenges young professionals. Many managers expect hard work from their junior accountants without providing them with coaching, rigorous development plans and a clear path for advancement. When ineffective finance managers fail to build loyalty and trust, they find themselves suffering the disrupting cycle of losing key people, rehiring and retraining.
8. Weak finance executives provide poor cash management
While every company encounters liquidity challenges at some point, companies with unfit accountants encounter frequent difficulties meeting important financial obligations, paying key suppliers, and missing payroll. A strong financial executive will think ahead in order to skillfully juggle scarce funds, negotiate with suppliers and perform miracles to ensure that staff are never paid late.
9. Weak finance executives fail to appropriately challenge the management team
Inept CFOs often find themselves intimidated by their colleagues, and allow them to get away with murder. Having the self-confidence to appropriately challenge fellow executives about targets, variances and overall performance is a critical requirement of the skillful financial executive. Incapable accountants demonstrate shaky leadership qualities and lack the gravitas to hold the executive team accountable.
10. Weak finance executives fail to add value
Weak accountants are undisciplined, pay insufficient attention to detail and often produce low-quality reports which are riddled with errors. Ineffective finance managers have the under-developed interpretive skills which result in poor forecasts based on faulty models with incorrect assumptions. A sound finance executive is fiercely committed to achieving results. He or she is passionately engaged in achieving the goals of the company, and this hunger drives excellence in his or her work. Competent financial executives are highly disciplined, fluent with their numbers, able to think strategically and have the ability to translate plans into effective action.
Here’s a short version of this blog post as a Slideshare presentation: