My brother-in-law is a firefighter. When asked what he does for a living, it’s fairly straightforward. For myself, I can never seem to make it that clear and succinct. Quickly upon meeting someone new, especially if it’s a parent of a child who goes to school with one of my own, the conversation eventually turns to, “So what do you do?” It’s a fair question. Moments before, I probably arrived just in time for the program or game, still wearing my collared shirt, slacks, and cordovan shoes. So I smile and nod upon hearing the name of their business, or job title such as, insurance agent, carpenter, or nurse, and I prepare myself. Then the words leave my lips, as they have so many times: I say, “Well, I’m a financial officer for a healthcare corporation.”
Next comes a nod or smile of their own, before we move on to talk about what a great job the teacher, or coach is doing. But just as often they are not so clear, or shoot me an inquisitive look. In that case I might add, “I work with numbers all day.”
That settles little, as I’ve discovered, despite the truth of it. Not to leave a person hanging, I add, “I work in accounting.” That statement usually ends it and we can go back to the program. Most people have some idea of what an accountant is, but the truth is I work in a field called Financial Operations. That was my job title for 8 years, although I’ve been in the field for fifteen. If you search the internet, you won’t find a college program offering a degree in it. It may sound like a position that exists more often in a larger organization, which it is. I work in healthcare, and my understanding is it has a different name in manufacturing and other industries. But if your company has a person that does this job, I can explain what they spend their day doing. They spend their days thinking about how information is passed around the organization. Is that a job, you may ask? It’s more of a purpose, I would say.
The growth in information capture has been explosive for many years. People are more accustomed to having their lives measured. However, inside many companies, old habits continue. A manager is emailed a P&L and a blank action plan and sent out to improve results. There’s a great deal at stake for most companies with their field/operations personnel, and getting financial and other information to those who need it, when they need it, and in a way they can use it, can be a resource consuming task.
But, you may say, if you work with the P&L, that’s not a mystery. You’re an accountant.
Yes, I have a background in accounting, and have spent many hours reviewing, revising, reconciling, and discussing the entries that make up corporate financial statements. It’s a specialized area that requires a depth of knowledge. Audited financial statements are required for most companies of any scale. But often a business manager is frustrated after a conversation with the accounting department. It’s true that sometimes an accountant can’t answer a question about a financial result, and they may have a legitimate reason why it has to be done that way and can’t offer more explanation of an accrual. In such an organization, the manager is simply asking the wrong person. Accounting is the accurate reporting of results in a standard format, but those results are by nature historical. A manager needs to know not just the financial impact of something that happened, but how their future actions will translate into measurable results. An operations, sales, other manager needs ask someone who looks forward, one involved in budget, projections, and measuring return-on-investment for new projects.
Now you say, we have someone who does that job too. It’s our finance director.
Many companies do, and if you are buying a big piece of equipment or a new computer system, you may get face time with him or her. But a Finance Director (this is my current job title) has a broad range of tasks, including external worries like SEC reporting, stocks and investment, banking and cashflow (as a short list). I’m talking about someone who has skills and experience in the above two categories, but also has P&L responsibility.
Wait, you now might say, I have P&L responsibility at my company.
I think that’s likely, because companies are mostly made up of people who actually do the thing that the company is known for. Departments like Finance and Human Resources support those roles. But the line workers are those held to the budget. I have worked as an intermediary between the operations staff and support departments for many years. But as someone who reported to operations rather than the CFO, one’s perspective on many things changes. Having a stake in the P&L, as any sales, product manager, or department manager will tell you, means having to live with your decisions and being held accountable for them. This can be a simple as figuring the true break even volume to justify a new (and impressive) piece of equipment. Or as complicated as knowing the tax implications for a partner for a required accounting entry, long before the returns are prepared.
It’s still about debits and credits, cash and capital for me. But its also about handshakes that make deals, and managers knowing that they can back up their promises a month or year from now. I heard that one of my old administrators said, “We miss him, he explained everything!” I feel good hearing that because then I know that I was doing my job.
I doubt that all this could be said at my child’s school, between the construction paper and the star student board. I hope that next time it comes up, the parent will simply look over and say, “I’m a firefighter.”
Then I can reply, “Really, that’s what my brother-in-law does!”