Hello to the new AICPA Insights platform
We are excited to announce that we have just migrated AICPA Insights to a new home at future.aicpa.org. The new website will offer a more dynamic, user-oriented experience, and allow you to choose what you will see based on your preferences.
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Once this migration is complete, you will no longer be receiving notifications for AICPA Insights posts. Instead, you can subscribe to CPA Letter Daily (CPALD) where you will be notified of new blog posts. You can subscribe to CPALD here.
New world, new skills finance professionals need
Even before the pandemic, digital transformation and new ways of working were significantly influencing the skills and capabilities finance teams need. The coronavirus pandemic accelerated that need as people and businesses sought digital experiences and solutions more than ever.
Based on conversations I had with CFOs worldwide, I shared insights [listen here via podcast]. They told me the skills and competencies finance teams must develop to adequately support the business in today’s world. Still as relevant now as they were a few months ago, these skills include:
- Knowledge of transformative technology
We’ve all had a crash course in working side by side with technologies over the past year. As our organization’s data has moved to the cloud and month-end closes have become automated, finance has had to get familiar with technologies such as robotic process automation, blockchain and data analytics applications.
Organizations have fast-tracked digital transformations to protect and serve customers in many ways and adapt to new business models.
Building skills to support this rapid transformation and being able to use technologies will put you in a great position. Our free Digital Mindset Pack offers members a chance to take a deeper dive into technologies such as robotic process automation and data analytics.
- Comfort with analyzing and presenting data
If working side by side with technology is important, the ability to use the tools and data at your disposal to affect decisions is even more critical.
“We need to be able to tell the story in a more convincing and succinct way,” the finance leader of a Fortune 500 manufacturing services company told me recently. After he grappled with how to make strides in digital finance transformation, he spent time with his business and finance team to effectively change management reporting from thousands of pages of information to a set of dashboards.
The change was challenging because it forced a new way of working as well as a new way of thinking — not only in terms of the generation of data but also in the ability to present data in a meaningful way.
The Association (AICPA® and CIMA®) offers several resources to help finance and accounting professionals grow their data analytics skills. Some of these include our data analytics certificate programs, articles and podcasts and an interactive data analytics quiz to test your skills.
- Ability to communication and think critically
Never underestimate the power of effective storytelling. You can uncover the best insights, but if your audience doesn’t understand your point, it’s moot.
Strong communication and critical-thinking skills — the ability to ask the right questions and to guide good and considered decision-making — are invaluable skills for finance professionals. If the ability to leverage technology and a deep understanding of the business support these skills, you have a powerful combination to lead your business.
Programs such as the CGMA® Finance Leadership Program help develop these co-piloting competencies. The program’s online, personalized learning experience helps finance professionals develop the necessary digital, technical, business, leadership and people skills. Our Agile Finance white paper and webcast series also provide ideas on how to reimagine your business and upskill your finance team for the digital era.
- A mastery of the basics
In a FM magazine interview, the CFO of GSK, Iain Mackay, talked about “getting the basics right.”
He explained, “It’s about finance doing what its core responsibilities are really well, consistently and sustainably in very difficult operating circumstances. It’s about the finance team being able to contribute flawlessly to the overall continuity.”
This mastery of technical skills is essential to ensure upskilling in the latest technical accounting and finance areas. We may need to unlearn and relearn some of the concepts we studied many years ago.
Prime candidates for this are approaches to risk management and scenario planning, which have been turned on their heads over the last few months. Look to our COVID-19 resource center to help you remain current in these areas.
- Ability to be agile and unlearn what you know
This is the most important skill of them all.
“Agility is about how flexible we can make an organization, a process or even an individual,” said a CFO of a global gas manufacturer and supplier. And pace, which is about “how quickly we can remove constraints and adjust processes to create impact.”
To support this mindset, we need to embrace continuous learning to help us adapt better to our ever-evolving work world and enable us to take future opportunities.
For example, McKinsey & Company offers six steps to reskilling and shares strategies to building a “no-regrets” skill set — a useful toolkit no matter how an employee’s specific role may evolve. Also, take a look at the CGMA Competency Framework to help guide a structured conversation on learning with your staff or your manager and build a no-regrets toolkit of your own.
Key questions to consider
As you reflect on these skills, consider these questions to discuss with your teams and your leaders:
- How has the pandemic changed your thinking on how you develop yourself and your people?
- What critical competencies do you require to meet your business priorities now and in the future?
- How do you align roles and ways of working to these critical competencies?
- How can you engage your colleagues in initial conversations to validate your understanding?
Learn more about the skills and competencies senior finance professionals need now to thrive. Seasoned CFOs from across the country will provide the latest innovation and anticipated trends to keep you on the cutting edge at the AICPA & CIMA CFO Conference. This all-online conference, May 5-7, brings together the profession’s leaders to share best practices and the latest insights to help you guide your teams.
Barry Payne, Director, External Relations — Management Accountant, Association of International Certified Professional Accountants
3 steps NFPs can take to prepare for continued uncertainty
A year has passed since COVID-19 began its worldwide disruption, but the full effects have not yet been realized. The anniversary prompts us to pause and consider where we’ve been and where we’re going. A recent Not-for-Profit Section webcast offered key takeaways to help not-for-profits (NFPs) manage current disruption and prepare for changes yet to come. The overarching theme? Plan for the worst, prepare for the best.
1. Build for tomorrow, not today.
Pandemic-related shutdowns crippled organizations that weren’t prepared to operate remotely. Those who already converted critical functions to cloud-based systems quickly pivoted to maintain business as usual. Organizations that could rapidly implement disaster-response plans and deploy operating reserves also typically fared better.
Thorough, scenario-based financial planning is critical for NFPs to thrive in today’s constantly changing world. Incorporating multiple scenarios into the annual budgeting process helps management identify possible triggers and look at impacts under various circumstances. Consider the following:
- Examine each revenue stream and consider possible outcomes (for example, best case, moderate, and worst case).
- Understand debt covenants and how various financial results might affect them.
- Identify critical operating procedures. Are they flexible enough to respond to an unknown future? Are backup procedures built in?
While it seems obvious to consider how the organization would scale back in difficult times, think about how to scale up. Uncertainty can lead to positive outcomes, and prepared NFPs can take advantage of those opportunities.
Stay on top of invoicing and collections so cash keeps coming in and conservatively estimate receivables. This equips an NFP to manage disruption. When forecasting, assume incoming payments will arrive after due dates and that pandemic hardships will negatively affect pledges. Cash forecasting should be frequent and transparent with both management and the board to avoid surprises.
Use calmer times to prepare for potential disruption. For example, consider applying for lines of credit before you need them. Negotiate payment terms for new contracts. Build your operating reserves. Review your operating reserve policy and update it, if necessary. Although you may not need these lifelines and leniencies today, you could in the future.
For an extensive look at timely NFP financial management topics and more, consider attending AICPA® & CIMA® Not-for-Profit Industry Conference online June 7–9.
2. Diversify revenue streams.
From event planning and fundraising to program operations and service delivery, not-for-profits had to think differently to get through the past year. For many NFPs, the pandemic magnified the same key concern: lack of revenue diversity. Looking ahead, consider how to build additional flexibility into your revenue streams:
- Are there new activities or programs that offer more diversification?
- What is working well, and how can you take advantage of that momentum?
Unrelated business income is not always something to avoid. Be sure to consult a trusted CPA adviser if you need help evaluating the potential costs and benefits associated with any new activity or understanding Form 990 reporting requirements.
3. Invest in agile infrastructure.
For a sustainable future, organizations need to build a culture of change. Consider your infrastructure and how you might boost agility:
- Technology systems — If you still have paper-based systems, how can you convert those to the cloud over time? How might you prioritize multiple conversions?
- Board governance — Look at your board structure and composition, roles and responsibilities, and committee charters. Are there gaps in roles or documentation?
- Human resources — What is your strategy for recruitment and retention in a disruptive environment? Would outsourcing certain roles provide more agility? Are your policies up to date? Is the staff cross-trained?
- Office space and equipment — Have you embraced remote working and workplace flexibility principles? Do you need less office space or more equipment? Are there leases that warrant re-evaluation or renegotiation?
Be intentional with your infrastructure investments. Plan ahead, consider user impacts first and communicate frequently with your staff during times of significant change.
When managing uncertainty, NFPs should plan for the worst and prepare for the best. Even in the most difficult times, there are silver linings. Preparation will help NFPs survive the bumps and ride the waves.
Lana Richards, CPA, Manager, Product Management and Development, Association of International Certified Professional Accountants
How to implement diversity and inclusion throughout your firm
Embracing diversity and practicing inclusion is critical to the success of your firm. Welcoming different perspectives and creating a true sense of belonging for everyone is how you build strong teams.
Many of us are familiar with the concept of diversity as including people of varying race, color, religion, sex, sexual orientation, gender identity or expression, pregnancy, age, national origin, disability status, genetic information and protected veteran status.
Inclusion, as a concept, can be more difficult to grasp and, therefore, challenging to implement.
Organizations have varying roles, and steps must be implemented at each level for the company to achieve diversity, equity and inclusion (DEI).
The CPA Firm Competency Model highlights each role at a firm and the DEI competencies employees should demonstrate. This model is a guide to help any organization get started and can be adjusted as necessary to complement your workforce.
Here are the suggested competencies for employees at each level:
An associate-level employee must be able to:
- Understand the ways diversity contributes to collective intelligence
- Communicate and express the importance of working in a collaborative environment with diverse teams to promote creativity and innovation
- Participate in regular training and other learning opportunities to expand their knowledge
A person at a senior level should have all the capabilities mentioned for associates, and should:
- Ensure equitable distribution of work and opportunities for growth and development
- Adjust and adapt communication styles to be effective in the workplace
- Influence others to take accountability for progressing DEI initiatives
- Advocate for diverse perspectives and act against non-inclusive behavior
Managers are expected to have developed the above capabilities, and continuously learn and model inclusive behavior; they’re expected to:
- Monitor the distribution of work and opportunities for growth and development
- Build, direct and empower a diverse team
- Understand and communicate the business case for promoting diversity and inclusion in the accounting profession
In addition to a manager-level skillset, senior managers and directors need to:
- Stay apprised of industry/market trends that inform and influence diversity and inclusion
- Establish and evaluate goals, actions and outcomes that promote diversity in performance reviews
- Observe cultural differences and adapt their way of communicating for varying audiences
- Establish mentoring relationships with talented and diverse managers in their firm
At this high level of the firm, a partner should:
- Actively sponsor diverse professionals by creating opportunities for them within the organization
- Advocate for diversity and inclusion in the accounting profession
- Demonstrate the firm’s commitment to fostering, promoting and supporting diversity and inclusion within teams and the firm
There are also competencies that cut across multiple roles. For example, every role should practice self-awareness to unconscious biases and participate in regular training on implicit bias.
The reality is that it takes a concerted effort from everyone throughout the firm to effectively implement diversity, equity and inclusion.
Want to dive into more resources?
By Crystal Cooke, Director — Diversity & Inclusion, Association of International Certified Professional Accountants
AICPA & CIMA: Working harder than ever to help you stay ahead
One year ago, we were still in the early days of the COVID-19 pandemic. Everything around us was changing, and the crisis thrust our profession into a new way of working seemingly overnight.
In this disruption, you never wavered. You adapted to the unpredictable environment, evolving what you do and how you do it to lead your clients, businesses and communities through the crisis. Because of your work, we’re on the path of economic recovery. And because of you, our profession not only endured, but it became more agile, influential and trusted than ever before.
Over the years, our profession has faced many challenges, but we’ve thrived because we have not bent to change — we’ve embraced it. The key to our continued success is our ability to adapt, innovate and grow no matter the circumstances.
That’s exactly what the Association of International Certified Professional Accountants (the Association) is doing. We’re building on our successes and embracing change to continue supporting you during this crisis and whatever lies ahead.
Driving a dynamic, prosperous, global profession
Four years ago, the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) combined forces to form the Association. Since then, we’ve achieved a lot for our members and the accounting and finance profession.
A few key efforts include:
Our larger footprint has also been vitally important in helping us drive the highest levels of accounting, auditing and finance quality globally. CPAs represent the highest standard of competency, ethics and quality and are of great value to the world’s economies.
We’re driving a dynamic accounting and finance profession worldwide, working hard to keep it strong, trusted and vibrant and powering your success and employability.
Joining together in a new way
Building on this momentum, we’re taking the next step in our journey to truly reposition the combined power of AICPA & CIMA as one global organization driven by the Association; one organization recognized as the most influential accounting body in the world; one organization that is the voice of our members, protecting the public interest and powering trust, opportunity and prosperity worldwide.
We’re exclusively using our AICPA & CIMA logo across all activities, except where legally and regulatorily required to do otherwise.
As a CPA as well as a member, I’m excited about this change and what it signifies — the opportunity to truly show the power and influence of AICPA & CIMA.
Rest assured that the AICPA continues to represent all the great things you’ve known, and this is only a visual change. The AICPA’s commitment to ethics, quality and the public interest remains, and we’ll continue to serve members and the public, grow the pipeline of future CPAs and promote and protect the CPA.
Where do we go from here?
Over the coming weeks, you’ll begin to see greater use of our AICPA & CIMA logo across our communications and activities. Certain activities will retain the AICPA-only logo due to their reference in state law or regulation and the importance to our public protection mandate — for example, the AICPA Peer Review Program. For the rest, we’ve already started to transition many of our products, resources, conferences and publications and will continue updating these in the year ahead.
If you have any questions related to this transition, please don’t hesitate to reach out to us. As always, we value our connection to you, and we thank you for your membership. Because together, as one, unified profession, we’re stronger. I look forward to where we’ll go next.
Susan S. Coffey, CPA, CGMA, Chief Executive Officer – Public Accounting, Association of International Certified Professional Accountants