Advice abounds in books, on the internet, and at various seminars about how to be a good business leader. Often, this information focuses on personality traits and soft skills, such as communication, vision, and humility. While all such things may be important or even indispensable for business leaders, accounting knowledge can also play a role in whether an entrepreneur or executive has a successful career.
Financial Management is Critical for Leaders
An article on bPlans listed poor financial management as one of the top reasons why small businesses fail. The article stated, “You must know, down to the last dime, where the money in your business is coming from and where it’s going in order for your business to succeed… Poor accounting practice puts a business on a path straight to failure.”
It is not just small businesses that may benefit from a leader who has a strong knowledge of how to handle cash flow, taxes, expenses, and other aspects of financial management. Even large, well-established businesses could get into trouble due to financial mismanagement.
Bill Mitchell, a loan expert, listed some aspects of finances that all entrepreneurs should understand:
● Asset-backed borrowing
● Strategic partnerships
● Credit scores
Business leaders should also have robust knowledge of things such as cash flow, profits and losses, taxes, and more.
To further understand how important accounting knowledge and financial management are to business leaders, consider a quote from an article published by the Nonprofit Finance Fund: “… the most effective leaders typically have a sophisticated understanding [of] their organization’s economics, making decisions grounded in financial realities. They are then able to use that financial information in their communication, demonstrating the strategic connection between mission and money.”
Do Accountants Make Good Leaders?
Many accountants already possess some traits that could serve as a springboard for making them great leaders. AccountingWeb listed 10 traits that every great accountant has. Among those traits are excellent organization, good time management skills, attention to detail, creativity, great communication skills, collaboration, and flexibility.
How do those traits compare with the traits that many experts say are necessary for great leaders? A Business Insider article that enumerated traits of great leaders mentioned that such leaders are creative and pay attention to detail. An article from Entrepreneur listed communication and open-mindedness (flexibility) as being traits of great leaders.
Of course, every individual has a unique personality. The traits that one person leverages in a leadership role could make his or her leadership style drastically different from that of another person. However, many of the traits that accountants generally possess could be adapted to help accountants thrive in positions where they oversee others.
Accountants may naturally learn leadership skills as they take on new roles and responsibilities in their careers, too. Someone with only an associate’s degree in accounting may step into an entry-level position that does not require any leadership knowhow. However, a person who possesses an online master’s in accounting could be better qualified for pivotal roles that require oversight of other workers.
Potential Leadership Challenges for Accountants
Business News Daily listed “accountant” as one of the best careers for introverts. This is because many accountants spend more time with numbers than they do with people. Because many leaders must spend a lot of time around people, leadership may not seem like a good fit for introverted accountants. However, this isn’t always the case.
A guest writer for Entrepreneur, Jeff Boss, wrote an article that detailed reasons why introverts make great leaders. He noted that:
● Introverts are prudent. They’re less prone than extroverts to take unnecessary risks.
● Introverts know how to listen and people are apt to listen to them. The quiet nature of introverts allows them to notice details that others may miss. Furthermore, because they do not speak as much as people who are more outgoing, others are more likely to give weight to what they say.
● Introverts are often humble. They are apt to have an accurate view of their abilities and limitations.
● Introverts can manage uncertainty. They are persistent in finding solutions to problems that might cause others to give up. Furthermore, they are often effective at resisting self-defeating tendencies; this might be because they are less motivated by external rewards than people with more extroverted personalities.
● Introverts are comfortable working alone. They are not made uneasy by isolation, which is a particularly useful skill for entrepreneurs.
Still, it may be a challenge for introverts to handle a high level of contact with other people. One article advises introverted leaders, “force yourself to participate in ‘small talk’ once in awhile, even if you think it’s useless. Take a public speaking class. Volunteer to take the lead on a new project at work that you may not know much about.” Doing such things can take introverts out of their comfort zone and help them grow as leaders.
A shy nature isn’t the only possible challenge for accountants who wish to become business leaders. If you notice personal flaws that you think might hold you back from taking on a leadership role, you may be able to overcome them. By performing research on how to improve yourself and applying what you learn, you may be able to thrive at the forefront of a company.
Putting Accounting Knowledge and Business Leadership Together
Though you might not immediately think accounting skills lend themselves to leadership, the unique creativity, attention to detail, excellent organizational skills, and other traits that accountants typically possess could serve as the foundation for a successful career as a business leader.
Whether you are an accountant who wants to become a leader or you are a leader who wants to hone your financial management skills, you may be able to accomplish your goals by pursuing higher education. An online master’s degree in accounting can help you better develop both your financial and leadership acumen. To learn more, visit Maryville University’s online accounting program.