The world of finance is a lot like a crime show. In both, you need to understand what happened in the past and for certain crimes you also need to understand and predict what will happen in the future so that you can catch the criminal.
When a crime is committed, “responding officers” are the first to show up in the area. These officers secure the scene with police tape, ask questions, get information and take down statements to accurately record in the report they give to the crime scene investigators.
Bookkeepers are similar to those responding officers. They are the first financial response at the scene of your business. Bookkeepers are typically the first financial position in your company. Depending on the size and life of your business, perhaps you are the bookkeeper and do the bookkeeping tasks yourself. Bookkeepers accurately record financial data and then verify daily, weekly and monthly that it is correct. These records are passed on to an accountant.
Who shows up next at the ‘crime scene’? The crime scene investigators (CSI)! The investigators go through and find every single shred of evidence there is. It is then meticulously logged and kept in order. The process and collection is imperative, since all evidence collection is governed by very strict laws.
Accountants are strikingly like those crime scene investigators. They are responsible for interpreting, classifying, analyzing, reporting and summarizing financial data. Accountants must stay on top of all legislation and laws that affect the work they are doing and the client they are working for.
Once the crime scene has been thoroughly dissected, all of the evidence is taken to the forensics lab and/or sent to the Office of the Medical Examiner. Upon reaching it’s destination, a battery of tests are run on the evidence depending on exactly what type of crime is being processed. There can be testing for DNA, ballistics testing if a weapon was involved and a vast array of others but each test run is crime specific.
This is where the lines blur slightly. As with the fact that no two crime scenes are the same, finance and financial positions are not exactly the same in each company.
It’s a fact, if you search for financial functions and positions online you will find more questions posted in chat rooms asking about the hierarchy of the finance department in different companies. People who are wanting to apply for jobs with these companies are asking where is the controller position? Why are there three different financial planning and analysis (FP&A) teams, etc. The answer is because while there certainly are standard finance practices and finance positions, each company and organization is unique and may utilize or structure them differently.
The forensics team, in coalition with the medical examiner’s office, is much like the controller. The controller, must look back at everything that has happened up until this point and everything they can prove with facts. This position is certainly not about speculation.
Financial Planning and Analysis teams, need to know the WHY.
FP&A professionals dig to find the story behind the numbers. They need to know the ins and outs of why things turned out the way they did. The FP&A team will then provide upper level management with the ability to make the best operational and strategic decisions with resources. Where accounting was recording all of those numbers, FP&A looks into any changes in those numbers and why the changes are happening.
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