The role of the accountant is undergoing a significant transformation. Not only are advances in technology reshaping the field of accounting, but finance professionals are increasingly playing a more strategic role in business decision-making.
Playing into both these trends is the ability to do financial modelling, which can propel accountants into leadership roles. According to a 2024 survey by the Financial Modeling Institute, 83% of respondents said that accreditation has had an impact on their career, while 60% reported earning a higher salary, and/or achieving a promotion or career advancement once they had their skills validated.
In a world of rapid economic shifts, it’s vital to be able to forecast accurately
Multidisciplinary skill
By financial modelling, we mean creating a forecast. While the concept is simple, it is a multidisciplinary skill that requires strong proficiency in accounting, finance, planning, collaboration, design and Excel. If done adeptly, financial modelling is a tool that allows users to make accurate and informed financial decisions.
There are a number of ways that financial modelling skills can help accountants in their career development. It enables them to build a forecast for a company, a project or a department. It can be used to inform decisions in planning and forecasting, credit/financing, capital budgeting, investment, mergers and acquisitions and valuations.
Developing financial modelling skills cultivates essential leadership qualities
In a world of rapid economic shifts and fast-moving market dynamics, it’s vital to be able to forecast accurately. Financial modelling enables accountants to assess scenarios and prepare for uncertainties. This readiness is necessary for businesses aiming to remain competitive and resilient.
Poise and confidence
Developing financial modelling skills cultivates essential leadership qualities. It enables the professional to ask strategic questions to help frame the organisation’s thinking about the future. It enables you to challenge conventional thinking and adopt alternative approaches. It puts you in the seat to manage projects, coordinating the efforts of all contributing professionals, and to lead teams of both junior and senior professionals. And it gives you the poise and confidence to communicate outputs and recommendations to the rest of the organisation and manage stakeholders’ expectations.
Accounting professionals can shift to being the projectors of future outcomes
What is more, financial modelling skills enhance your ability to think strategically, make data-driven decisions and communicate complex financial concepts effectively.
Financial models have become the most important decision-making tools in finance. As the financial modelling expert on a team, the professional accountant is positioned as the linchpin who can derive insights from data and influence decision-making to make a significant impact on outcomes.
By understanding how to do financial modelling, accounting professionals can shift from being the interpreters of past data to the projectors of future outcomes. With the ability to generate insights, influence decisions and make a significant impact, those who excel at financial modelling will be at the forefront as this field of accounting continues to evolve.
More information
Find out about Advanced Financial Modeler (AFM) accreditation from the Financial Modeling Institute, in partnership with ACCA.
