An accountant’s competency is typically measured by his accounting knowledge, his ability to comprehend the financial numbers and understand the business’s financial processes and commercial operations. Yet an accountant who fares well in all these attributes may fail because of lack of competency in one essential trait – communication. From time to time, we get to interview candidates who are interested to join us, who are competent in accounting and display a lot of technical abilities but fail when it comes to communicating their thoughts in a clear an concise manner. Knowing how important it is to have communication skill in business, we try our best to improve them in this aspect and we have even gone to the extent of hiring people whose job is to act as a communication link between the client and our team.
Finance Communication
Communication is a much needed skill required to work in any organization, and an accountant needs to be communicating with almost every person who is connected to the organization. It is, therefore, imperative for an accountant to be competent in basic communication skill. The importance of communication in accounting is captured in this article by Sheila Shankar, excerpts from which are reproduced below:
“Management
The most important use of accounting data is to communicate meaningful information, allowing management to make good decisions. To be effective, accounting information must make sense and be understood; or else, it is just a list of numbers with no real significance. Many businesses use templates for internal reports to communicate information in a matter that is familiar and easy to use by management.
Investors
Another important user of accounting information is the investor, who wants to know how a business is doing financially. Usually this type of information is communicated through standard reports, such as balance sheets and income statements, compiled using generally accepted accounting principles.
Government
Accounting information needs to be communicated properly to government entities in the case of taxes. For example, Texas requires sales and use tax on certain items and accounting information must be presented a certain way to be significant.
Banks
Banks may want to be appraised of financial situation of businesses, making communication of accounting matters a priority in many firms. In case of bank loans, there may be periodic reports using accounting information.”
Conclusion
It is necessary for an accountant to be able to provide a clear communication to all the stakeholders in an organization, unfortunately in India it is slightly tougher to get accountants who are also good in their communication skills. Some organizations even go to the extent of conducting special training in communication and implementing protocols for communication within the organization to increase its effectiveness. You can read the complete article here.
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