In the year, 2014 & 2015 I came up with series of research Insights name Invisible Capital – Cost Accountants where a total of 5 parts of Insights in SERIES 1 &2 were shared for the professional development and key things required to be adopted for Cost Accountants to develop. In between the years also I have written numerous insights on the cost accountants' development and how one can become a management accountant.
Thinking of cutting down cost and cost control being a cost accountant or CFO having the cost accounting as the qualification, well your job is lost since it has been taken over by two different segments 1) Technology and 2)The Pandemic itself. If you are dreaming of becoming CFO down the line in the next 10 years from being a cost accountant then you will never get the position just doing bookkeeping, financial reporting, and preparing budgets. The strategic cost management role has now got redefined and new a paradigm has come to play. Doing the maths and managing accounts is not the recipe for becoming CFO.
Do you know that you may not have to wait for 20 or 30 years to become a CFO from a cost accountant? You can become CFO even within 5 years of becoming a cost accountant. Yes, it’s no longer a dream to be achieved so long, the time and era have changed. All you need is to focus on the key areas and understand what you need to know and how fast.
The role of getting promoted from being a Cost Accountant to the CFO level has changed and now is a cost accountant you cannot become CFO. Gone are days of managing statutory compliance, bookkeeping, and preparing quarterly reports for the management. These things will no longer get you the promotion of CFO from a Cost Accountant. If you simply remain with these traditional aspects of accounts and costing then you will never scale up in your life to become CFO. The demand of the CFO and the journey from a cost accountant to CFO has changed and demands new tools.
Pandemic has replaced the work of the cost accountant as a cost-cutting and cost advisory person. You are no longer required for these two jobs. The pandemic has brought down significantly all areas of the excess cost just like cutting the fatty part from the body through an operation conducting over the past 18 months.
Your role as CFO is no longer now cutting down cost and reallocation of cost and designing product mix and neither running around the factory shop floor.
Pandemic has changed every job and its core values. Gone are the days whereas cost accountant you used to do these works and the expectation of the management was also in the same lines. But technology has replaced most of the strategic segment of the cost accounting profession. This also raises the question that the syllabus of the profession also needs a significant overhaul. Well, we will come to this later on of the research insight.
Under the current regime of developed business models, CFO is now the new CEO. Now being a cost accountant merely doing accounting work is not going to get you the position of a CEO. How hard you can debate but the fact remains that the roles have changed and only an accountant is no longer required in an organization.
The current CFO is treated as next to CEO since their role has changed dramatically. The Future CFO’s will be treated as strategically relevant to the company where they will drive the direction and success of the organization. The CFO is one of the strongest data in a whole organization which helps to leverage strategic decision making, driving the whole organization towards new success. The CFO helps to take appropriate decisions regarding capital funding without taking compromise the capital structure.
Being a CFO he understands the risk and risk mitigation aspect of an organization and its business. The cost accountant role does not cost control but sustainable business growth. Today the whole world is looking forward to sustainable business models, technological cost integration, and business expansion. Being CFO one has to create a new benchmark of optimum utilization of capital resources without impacting the capital structure.
When it comes to spending having sound knowledge about the business, market, and industry is imperative. In the 18 years of my career, I have across many cost accountants and even chartered accountants who don’t have sound knowledge of business and the market. They failed to take key decision leads and hence they started fighting more for professional rights whereas they lacked the fundamentals.
If you’re a Cost Accountant then focus on becoming a management accountant since the upcoming new era of demand and expectation from the professionals to become CFO is not only quite different but a different route.
Yes, this has been the key legacy problem of the earlier generation of cost accountants down the line last 20 years. Giving exams on calculus and the legal aspect itself is challenging for the current cost accountants. There is a complete disconnect between what is required and demanded in the coming next 10 years. The vision is restricted to news journals and seminars but not on the syllabus of passing the exam.
Will be soon coming up with the next one of this series.
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