[IMGCAP(1)]Brands and corporate logos, from Coca-Cola and IBM to sports franchises, must periodically go through brand refreshes and upgrades to stay relevant.
Whether this is due to marketplace changes, competitive forces or even regulatory requirements is less important than the fact that organizations and professions must continuously evolve. The business environment has rapidly changed, evolved, and expanded during the last 10 to 15 years, and particularly quickly since the financial crisis.
Shareholders and other stakeholders demand more information, delivered in a user-friendly format, and in a real-time manner than ever before. These reporting requirements are compounded by the growing importance and influence of nontraditional stakeholders. As shown routinely by news headlines related to environmental issues and activist investors, it is clear that business must adapt to a new marketplace. But what does this have to do with accounting, a conservative profession by nature?
Accounting and accounting professionals are, at the most basic level, preparers of financial and quantitative information. While these traditional areas of expertise form the foundation of the profession, it is clear that the scope of responsibility is increasing. Working closely with planning, treasury and IT, accounting professionals increasingly find themselves working on multi-team projects that have wide-ranging effects on the organization. Clearly, accounting is more than debits and credits.
Stripping away the superfluous reveals what accounting, at the end of the day, truly is: analyzing and leveraging quantitative information to make business decisions. Against this framework, and viewed through a wider lens than just financial statement preparation and attestation (although these are still critical skills), it appears that the case for an accounting re-brand or brand refresh is strong and growing stronger.
Business decisions require timely, comparable and actionable information in both quantitative and qualitative forms. Accounting at its core—and via the expanding scope of financial professionals generally—is increasingly involved in nonfinancial projects that make use of quantitative data. Linking this to the growing importance and relevance of Big Data, analytics and predictive analytics reveals a simple, yet powerful, truth. Accounting professionals are, and always have been, data professionals.
While this has traditionally been focused and directed toward the reporting and organization of financial information, many of the same principles and concepts can, and should be, used with nonfinancial information as well. Taking all of this into account lights the path forward for accounting professionals, who can 1) remain valuable to organizations, while 2) developing new skill sets to increase their value in the marketplace.
Accounting tools and methodologies, from activity-based-costing to ratios, and the ability to quantify the qualitative (such as the effect of LEED projects or good governance on the bottom line) represent key aspects of the accounting profession. Drilling down and understanding the drivers of revenues, costs, customer churn and profitability are essential for any organization in the modern business environment.
Operational applications are equally as important. How many of X drives Y, and what is the effect of changes to both X and Y on performance? These questions are at their core sensitivity analyses.
Last but not least, organizations have to interpret data from the market, whether it is related new products and services, compliance or shareholder engagement, and be able to quantify these effects.
Accounting professionals are well positioned to take advantage of these business needs to leverage their existing skills and expand the ways in which they provide value to organizations. Accounting, in the areas documented above, is well on its way to rebranding itself in a consistent, yet innovative, way, turning data into dollars.
Sean Stein Smith, MBA, CPA, CMA, CGMA, is senior accountant in environmental services at United Water in Harrington Park, N.J., and an adjunct faculty member at Fairleigh Dickinson University.
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