Thank you for joining and welcome to the second Pioneers update, which looks at your role and the role of the finance function in communicating insight that is impactful.
In this issue, explore how management accountants can drive integrated thinking through improved communications; discover how we launched the Global Management Accounting Principles in its sixth language; then get up to date with the latest thinking, including an exclusive webinar on cost transformation.
Communication before calculation
As you’ve studied accounting, you will, without a doubt, understand ‘the numbers’. You will be able to scan management information and find meaning instantly. Finance issues will be obvious to you. Red flags will jump out. And because of your high numeracy skills you will be able to understand non-financial metrics with the same ease – ratios, percentages and jargon hold no fear for you.
But for people without a numbers background, getting insights and drawing conclusions from the data can be a slow process. For many people this is a real challenge, if they can do it at all.
As finance transforms itself into business partnering the communication skillset becomes more and more important.
Management accounting begins and ends with conversations. It improves decision-making by communicating insightful information at all stages of decision-making.
Good communication of critical information allows management accounting to cut across silos and facilitates integrated thinking. Integrated thinking ensures that the consequences of actions in one area of the business on another area can be better understood, accepted or repaired.
Discussions about strategy execution take place at all levels of the organisation and should involve all employees, eliminating siloed activity and thinking. This allows a clear line of sight between top-line objectives and individual targets. Management accounting brings rigour to these conversations, rooting them in evidence and informed judgement about the future.
The level of detail and method of communication should be tailored to users of the information, to the decision under discussion and to different decision styles.
This can help build consensus about the best course of action, with the final decision being underpinned by robust justifications.