The corporate finance landscape has changed significantly over the past decade. The CFO role has evolved to include more oversight and influence across the organization, which makes sense when you consider that the CFO has visibility into every single part of the business.
As a result, the role of a typical CFO has shifted, with a stronger emphasis on managing change, driving growth, and spearheading investment decisions.
The CFO as strategic partner and change agent — instead of purely a number cruncher — is a welcome evolution. But it’s important to remember that the language of finance is, and always will be, numbers.
The most visionary software engineers could not have launched their world-changing companies without a deep understanding of computer languages. The architects whose buildings define the skylines of the world’s greatest cities couldn’t have built them without intimate knowledge of the load-bearing properties of glass and stone.
And, the CFOs who have masterminded edge-of-your-seat business turnarounds or found efficiencies that transformed their companies — they could not have done those things without a rock-solid foundation in accounting.
Whether you started your career in the field or gathered the knowledge along the way, accounting skills play a critical role for today’s CFO. Mastering the complexity of financial reporting and compliance makes understanding today’s continuously changing regulatory environment that much easier. This knowledge enables both strategic and financial perspectives when advising leadership on decisions related to new revenue recognition guidelines, the convergence of U.S. GAAP and IFRS to a more global accounting framework, the changing mergers and acquisitions landscape, and countless variables that impact business.
Consider the sheer complexity of interpreting continuously changing tax laws and needing to thoroughly understand the reporting and economic implications of these laws. Without a strong grounding in accounting, someone trying to make sense of these high-risk, complex areas would likely be completely lost.
It’s no surprise that tax accounting and revenue accounting are often where companies make missteps. Understanding this accounting puzzle — complicated by country-specific statutory requirements necessary for global compliance — is essential to keeping a company out of trouble and in good standing in the markets where it operates.
For larger organizations, accounting plays an essential role in informing CFO decisions that impact the financial statements used by investors and the public to evaluate a company’s results. Of course, accounting processes also play a significant part in employee-facing matters such as payroll, expenses, and stock compensation — all critical to an organization’s ultimate success.
At the end of the day, while the CFO role has changed to include a broader skillset and a deeper understanding of organizational performance, an accounting background is still a key building block that contributes in numerous ways to the overall health of the organization.
Robynne Sisco is chief financial officer of Workday Inc.