Business Up Front - October 2003

Business Up Front

It’s Not Just Bean-Counting

Accountants Need More Than Numbers Know-How

Accounting graduates entering today’s job market should be prepared to highlight their technical expertise as well as their gift for numbers. Chief financial officers (CFOs) surveyed recently said that in addition to accounting skills, they look for professionals who have information technology proficiency and business acumen. The survey was developed by Robert Half Finance & Accounting, a recruitment firm specializing in the placement of accounting and finance professionals, and included responses from 1,400 CFOs from a random sample of U.S. companies with more than 20 employees.

CFOs were asked,

"Other than traditional accounting knowledge, which one of the following skills is most in demand for accounting and finance professionals today?"

Information technology	34%
General business knowledge	23%
Communication skills	17%
Customer service orientation	11%
Leadership abilities	9%
Other	1%
Don’t know/no answer	5%
Total	100%

"To improve efficiencies, organizations are automating many of their accounting functions or upgrading their financial information systems," said Max Messmer, chairman and CEO of Robert Half International Inc. "As a result, recent accounting graduates with a demonstrated aptitude for technology-related projects are at an advantage in a competitive market." Messmer pointed out that business expertise remains critical: "Increasingly, accounting professionals provide guidance on the financial impact of decisions ranging from information technology investments to corporate governance issues. This requires an understanding of broader business concerns as well as traditional finance and accounting skills."

Did Noah’s Ark Have a Surety Bond?

The Surety Information Office (SIO) recently released the following historical information about surety bonds, which offer written assurance that a contractor will complete a contract on time, within budget and according to specifications. Bonds can also guarantee that a contractor will pay all subcontractors, laborers and materials suppliers.

The first known record of contract suretyship appeared in an etched clay tablet from Mesopotamia around 2750 B.C. One farmer contracted with another to tend his fields under the condition proceeds were split equally. A local merchant guaranteed the second farmer’s compliance.

The first known written legal code, the Code of Hammurabi, written around 1750 B.C., contained references to surety bonds.

A Babylonian contract of financial guarantee from 670 B.C. is the oldest surviving written surety contract.

The Roman Empire developed laws of surety around 150 A.D. that formed the basis for principles still in use today.

Cost Reduction Improves Bottom Line

While business owners’ first reaction during tough times is to look for ways to increase sales, cost reduction often is a better way to increase profits. "Too many business people view cost reductions as difficult," explained Israel Kushnir, president of George S. May International Company, a management consulting firm. "And, while there is no Cost Reduction Department, there is a Sales Department. Owners see the effort to obtain sales as already being organized. On the other hand, cost reduction opportunities are scattered throughout a business."

Kushnir cautioned, "Increasing sales is no guarantee of more profits. Making sales in tough times typically means harder bargaining. Buyers may demand more concessions from sellers. And in the search for more sales, service to existing customers may suffer." Considering these factors, looking inward for cost reductions can become a much more profitable choice than looking outward for more sales.

To illustrate the value of improving inside operations and to motivate business owners, May International has developed the accompanying table showing the amount of sales it would take to equal cost reductions.