From sticks and catapults to mechanised armour and flying squadrons to current day cruise missiles and laser-guided munitions, military warfare has evolved tremendously with technological advancement. The infantry model has expanded to include specialised units for tanks, air force, artillery and commandos.
As field commandos quickly learnt, the infantry soldier cannot fight – and –win every battle on every scenario. Specialised teams with niche training are needed to be prepared for everything and anything on the battlefields.
Now, that is not too different in the current business world. As business become more complex and diversified, gone are the days of “one company, one business” Nowadays, it is the norm to see a group of companies with business divisions operating in different sectors, for example, software, hardware, petroleum and supermarket retail; yet all working together seamlessly to meet shareholder needs and expectations. And this is happening against a backdrop of dynamic changes, including new regulatory requirements and changes in corporate governance and accounting standards – the interplay of which creates multiple, varying scenarios that companies need to cope with every time they make or report a business decision.
In order to meet these challenges corporate finance departments in many countries have grown dramatically in response to all these changes and demands. Where we used to just have a CFO with two or three financial controllers and senior accountants, this core team is sometimes now supplemented with a chief accounting officer, corporate taxation team, derivative accounting and valuation team, revenue recognition team and the list goes on.
Our regulatory and accounting environment has become so complex that specialised accounting and taxation professionals have become essential.
Just as specialised units such as the commandos are called in to defuse pressing and uniquely demanding situations beyond the infantry soldier’s capabilities, so too specialised accountants, which we liken to “commandos”, are called upon to deal with niche issues that are not run-of-the-mill. Most corporate finance departments are geared to deal with recurring and familiar issues and the running of the day-to-day book-keeping and business; they are not geared to tackle infrequent demands such as restructuring, business combinations, new revenue operating models or adopting new accounting standards or regulations.
In these latter situations, companies are likely to need the help of accounting advisory, valuation, taxation or IT consultants to walk them through the myriad of work steps amid competing demands on time and resources. Here’s where the “commando” accountants come in as a cost-effective solution to bring under control the complex issues, leaving the management to focus on their core work. So, field commanders or CFOs, should assess their current status along with the availability of resources and skills to determine whether there is a good match of needs and wants.
Where there is a gap, specialised help should be summoned to tackle the problem. Battle plan and scenario planning should be drawn up ahead of time to anticipate needs, reallocate resources and mobilise specialised help to the battle frontlines of the board rooms and shareholder meetings. Having the right people matters – just like at a crucial turning point in any war, every commander- in -chief will want to have their best resources and teams fighting for their cause.
(The writer is Partner, Ernst & Young.)