Communication skills in Accounting Profession

Question: Discuss about the Communication skills in Accounting Profession. Answer: Introduction: Managerial profession require managers to handle and lead groups or teams of subordinates and peers. Their professions demand certain skills which make them competent for the positions. For example, an accounts manager needs to have accounting skills and a profound knowledge about areas like taxes, tariffs and so on. Competencies refer to the qualities like leadership qualities, decision making ability and so on which managers should have to carry out their functions and include skills (DuBrin, 2015). The skills differ with job roles like; the skills of an accounts manager are different from a marketing manager. However, competencies go beyond skills and are expected from people holding same position like; both the marketing and the accounting managers should have a deep knowledge of macroeconomic and microeconomic scenario (Whittington, 2014). Communication skills are one of the most important skills managers should have and one of the most important competencies of an accounts mana ger (Coombs, 2014). Literature review: All internal and external operations of the business organisations involve flow of money and impact their financial positions. The accounts managers around the world along with their departments record the impacts of these operations in terms of money and present them before the apex managements. These require them to have strong written communication skills due to the following reasons: The nature of accounting: The accounts managers have to be good communicators who are able to present accurate information before the apex managements on time. Accounting by nature is a complex and vast area which encompasses financial transactions, profits, risks, investments and so on. IT is regarding as an art of reporting which has evolved with technology and has international influence as well (Owen, G. (2013). The financial reporting has to be communicated to the stakeholders including shareholders. This complex nature and the far reaching impact of financial reporting require the accounting managers to have very strong written communication skills. This helps them to communicate accurate financial and accounting information to the top management and the stakeholders. This helps the management to take accurate strategic business decisions in various fields like risk, investments, business diversification, marketing and so on. Figure 1. Complex financial statement of an organisation (Source: "Commonwealth Bank", 2017) Client communication: Business organisations today irrespective of size, work mostly on stakeholders approach. This makes the strategic policies and decisions important to entities like suppliers, distributors and consumers to whom the companies sell their products. The accounts manager have to communicate accurate decisions to these bodies in various written forms like mails, website updates, newspaper reports and so on. The written communication helps the supply chain elements and consumers to take important decisions regarding purchase and stocking of goods. For example, a rise in stock prices of General Motors published in newspapers and journals will aptly encourage the suppliers to work with the company. The prospective buyers will also consider buying Ford by the company because such written communications also reflect the credibility of the products of General Motors (Wilshere, 2017). Quotas: All organisations sell products to their clients and have several departments involved in these functions. They project certain sales targets which are the quotas. The account managers communicate the financial resources allocated to these departments in various forms of written communication. Accurate and transparent communication by the accounts departments helps these departments to prepare budgets according to which they function. For example, accounts departments communicate the amount allocated to the departments like production, research and development, sales and so on. He also informs them about their bonuses, target revenue and other financial information. It can be pointed out that a strong and transparent accounts department headed by managers with strong written communication skills are crucial to successful companies. Reporting: The accounts managers prepare several financial reports like annual sales forecasts, quarterly profits from sales and so on based on the sales reporting. They are responsible for presenting and reporting this information before the senior management in integrated manner. Experts forecast that Integrated Reporting (IR) has strong impact on the short and long term goals set by the management (Rensburg Botha, 2014). Thus transparent written communications from the accounts managers help the apex management to take strategic decisions. IR and the accurate financial reporting by the financial managers are aligned to the present corporate structures based on stakeholders theory. Today the future of all organisations depend on the judgements of stakeholders consisting of investors, customers, shareholders, governments, financial institutions and all other external entities. Their judgement is in turn dependent on accurate communication of financial reports. The management communicates the financial reports to the stakeholders on being provided the information from the accounts managers. Thus, the written communication competencies of the accounts managers form the ground of accurate reporting of a companys position (Cornelissen, 2014). Investment and financial strength: The accounts managers of multinational companies are responsible for communicating important financial information to the management. These figures are published in several journals and reflect the financial strengths of the companies. These written communications encourage investors to invest in the stocks of the companies which help them to generate capital from the market. It can truly be said that the accurate written communications from the desk of accounts managers help companies attract investment. This forms the base of the enormous global capital strength of the organisations. The financial strength of organisations reflects their competitive strength and market position. For example, Vodafone reported on March 7, 2017 announced a market capitalisation of USD 71.12 billion on NASDAQ (Sparks, 2017). NASDAQ forecasts a rise in the share index of Vodafone in the future. This increase in share price can also be attributed to the communication of market capitalisation of Vodafone . Market capitalisation reflects the financial strength of a company which attracts capital investments. Figure 2. Chart showing rising share index of Vodafone (Source: "Vodafone Group Plc (VOD) Stock Chart", 2017) Importance of written communication to an accounts manager: The corporate communication initiated by the accounts manager plays a very crucial role in the operations of a company. The communication forms the basis of decision making procedures both within and outside the originations. External functions: Accounts managers need to have very strong communication skills because their reporting has profound impacts on the stakeholders decision. The consumers today prefer buying goods and services from producers to use sustainable technology to produce their goods. The accounts managers communicate the pricing strategies through online and offline journals and newspapers (Palmer Greenblat, 2017). The investors depend on these corporate announcements by the accounts managers before investing. Thus, the ability of the finance managers to communicate accurate information to the stakeholders help a company to create a positive image of itself in the market. It helps the company to gain favourable business positions and deals in the market. Internal functions: Accounts mangers are dependent on all the other departments like sales and production to get important information. For example, the production department provides the figures of stock of raw materials and work in progress. The sales department provides sales figures and forecasts which reflect the revenue, debtors and bad debts. All of these items are a part of the financial statements and reporting. The accounts managers present the same before the top management and the shareholders. The accounts managers in turn communicate allocation of capital towards various departments like operations, administration and so on. The reporting of the accounts manager forms the basis of financial and strategic decisions by the management which are again communicated down the hierarchy. Written communication skills of accounts managers ensure that the reporting is free from manipulations and accurate. Thus it is the very foundation of smooth operations within the organisations. It results in bett er understanding between the management and the employees, thus creating a healthy organisational culture (Khan, Muttakin Siddiqui, 2013). Crises management: Risk is an integral part of all business activities and impacted by the global economic happenings. The accounts managers through the financial statements communicate the business risks like credit risk exposures and trade market risks in various financial documents. The management can take important strategic decisions to diversify those risks and face crises situation. Written communication as a competence: The written communication skills of managers are a part of their managerial competencies. The companies train their management to sharpen their communication skills as a part of their managerial competencies. The communication skills enforce other skills like judgement, teamwork, and reliability. It makes managers transparent before the management, peers, superiors and subordinates (Tench Moreno, 2015). Conclusion: As an accounts manager, it is crucial to have written communication skills because the role of a manager is to present accurate information before the higher management. The managers with excellent written communication skills are more successful and become eligible from promotions and recognitions. The managers aspiring to build great careers should posses superior communication skills and should be competent of preparing various statements and reports. Communication skills should be accompanied by other skills like initiative and creativity, judgement, dependability, commitment, adaptability, problem solving and so on. These skills will help managers to create positive impacts on the management, superiors, peers, subordinates and the companies as a whole. References: Commonwealth Bank. (2017). commbank.com.au. Retrieved 28 March 2017, from https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/annual-reports/2016_Annual_Report_to_Shareholders_15_August_2016.pdf Coombs, W. T. (2014).Ongoing crisis communication: Planning, managing, and responding. Sage Publications. Cornelissen, J. (2014).Corporate communication: A guide to theory and practice. Sage. DuBrin, A. J. (2015).Leadership: Research findings, practice, and skills. Nelson Education. 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Retrieved 28 March 2017, from https://theriponadvance.com/stock-for-investors-portfolio-vodafone-group-plc-vod/12163067/ Tench, R., Moreno, A. (2015). Mapping communication management competencies for European practitioners: ECOPSI an EU study.Journal of Communication Management,19(1), 39-61. Whittington, R. (2014). Information systems strategy and strategy-as-practice: a joint agenda.The Journal of Strategic Information Systems,23(1), 87-91. Wilshere, B. (2017). Analysts Review: General Motors Company (NYSE:GM) Post Registrar. Postregistrar.com. Retrieved 28 March 2017, from https://postregistrar.com/2017/03/27/analysts-review-general-motors-company-nysegm/