Continuum of Accountancy Ireland & Barden (Career Guide 2017)

Another lens through which you can view your experience or a job opportunity is ‘the continuum of activity’.

We can use this visual representation of the basic activity in a standard finance department in a few ways:

Establish a common language
To the left of the line in Illustration 1 is what has happened in the past – let’s call it ‘financial accounting’. From left to right are all the transactions that add up to the creation of a set of accounts (P&L, balance sheet or income statement) for a company. That’s where financial accounting activity ends and where financial analysis activity begins.

Crossing into financial analysis activity, we first analyse the P&L and assess or comment on variances. Next we get into budgeting, forecasting, analysis and planning (BFAP) of operating expenditure (costs), capital expenditure (investments) and then on to revenue (sales). One could argue that the further to the right on this continuum, the more commercial the activity. Although, one could also argue that saving on costs can lead to more profit than an increase in sales. It depends on what’s important to the company at a given time and, of course, where on the continuum you spend your time.

Either way, once you get to strategic planning and beyond, you will find that the typical responsibilities of the finance team end and the responsibilities of the executives, operations and sales/marketing teams begin. It’s by moving in this direction that accountants find themselves moving out of accounting and into business.

Weighting of activity
Now that we’ve a common language, albeit a loose one, and a way to differentiate between activities, it’s easy to figure out where you spend your time (or what you want your hire to spend their time doing). Get a pen and circle where you spend your time over the standard monthly or quarterly cycle. Then, ask yourself a few questions:

  • Is your job all to the left of the line, or all to theright of the line?
  • Does your job cross the line? If so, how much of it is on either side (i.e. the weighting of activity)?
  • Where is your ideal circle? Is there an overlap with your current circle? Remember that an incremental move in the right direction is more probable than a leap from one side to the other.

Applying context
If your circle covers the entire continuum, the chances are that you’re working in a small company. If the circle for your new hire covers just one of the activities, then it’s likely that you’re a hiring manager in a larger company. This basic model can also be adapted to more complex situations. The corporate landscape context will warp the continuum and add myriad additional considerations. Consolidations, corporate finance, treasury, internal audit, risk and compliance can be represented on this continuum if it’s drawn out for a group function in a large plc. BFAP can be broken into back office (just the analysis), front office (gathering information from people in the business and using this information to effect change in the business) or middle office (a combination of the two). Systems implementation, IFRS conversions, IPO preparations and a whole array of other activities can be plotted or mapped on this simple model. Experiment with the continuum – it can be a very useful exercise and enable highly strategic career moves and hiring.

Other factors that affect context
We’ve looked at the nature of your day-to-day activity, where it sits on the supply chain, organisational structure and some other factors that can be quite defining in terms of your current and future career options. However, this isn’t an exhaustive list. There are other factors that need to be considered to give a true reflection of context. These include:

  • Reporting lines – do you manage a team? If so, do you manage qualified accountants? What does your team do? Who do you report to?
  • Level of autonomy – are real decisions made locally or at another site?
  • Culture – where is your parent company based? Does the culture of that country impact on the way you do business? Working for a German company is very different to working for a US company. Likewise, working for an east-coast US company is different to working for a west-coast US company.

What other factors might affect the context of your experience? Are there some things you want to maintain in your next role? Are there some things you’d like to get away from? Assessing your current role in these terms can help peel away some of the layers and help you understand a little better where you are right now and where you want to be.

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