Have you recently qualified as a CA(SA)?
Congratulations to you and everything of the best going forward!
Now that you have the best business qualification available, there are quite a few things that you can do as a CA(SA) – and I’m not talking about partying on Ibiza or taking an excursion into the Himalayas!
There are a number of paths you can take; each has its rewards and its consequences.
The route you now take may, to a large extent, determine your destiny. Wrong choices could result in unnecessary job changes. Changing jobs too frequently is the worst contaminant of your CV. Most employers will pass over a CV that has too many movements as it reflects, rightly or wrongly, an unstable character. So do not be hasty.
I’m not suggesting that you be neurotic about this. What I am suggesting is that you apply your mind cautiously, taking into account the things that are important to you.
Where do you see yourself in the future?
When setting out on a career path, it is advisable to define what best suits your ambitions.This may seem like a big ask, so early in your career, but it actually is not.
Essentially, there are only seven places that you can aim for in the context of a CA. Knowing this makes it so much easier.
Let’s break them down
- Partner(as in auditing/consulting)
- Chief Financial Officer (CFO)
- Chief Executive Officer (CEO)
- Financial Services Professional(this includes banks, private equity, asset management, venture capital, insurance, internal audit and capital raising).
- Internal Auditor
- Professor– academia
- Entrepreneur– your own business
Once you have determined your desired long term objective, it far easier to make the shorter term choices.
Now I’m making this sound easy.
It’s not!
It requires some serious introspection.
You might want to get yourself a mentor/coach to help you find out where your true aptitude lies.
Once you have established the broad brush direction, the rest falls nicely into place.
Let’s have a look at each career path and see how this unfolds in the context of what has been described above.
- PARTNER
Becoming a partner in a professional practice is clear-cut. You stay on as a manager, progress to an associate director, move onto a director and then finally make it to a partner.
The real wealth-creating opportunity is getting to equity partner status. This means that you share in the profits of the partnership on an ownership basis.
You might find that you have to initially pay a capital amount to ‘buy in’ and you will pay for it by taking less upfront earnings. In the bigger practices, however, this is not the case – you emerge based on your ability to generate new clients.
The downside is that you become jointly and severely liable for all liabilities of the practice. Of course, there is malpractice insurance available. But the risks are growing all the time as auditors/consultants find themselves increasingly under fire from stakeholders, with SARS being particularly aggressive.
Most of the bigger auditing practices have established separate companies, within the ambit of their brand, offering other affiliated services like internal audit or financial services and tax consulting. This is an expanding part of the professional environment. The onerous issues surrounding auditor’s independence have blocked the traditional one-stop-shop accounting services model. Accordingly, firms are effectively ‘swapping’ clients to keep this part of their business growing and thriving.
So, in effect, staying in the profession is simply a continuation of your auditing career. It might include a partial move, out of traditional auditing, into areas such as tax compliance and planning, system analysis, risk assurance and management consulting. But it’s all still a time-based product where you will need to account for every potentially productive hour.
Note that you will be operating in the ‘Big 4’ space and, whichever way you look at it, they will always be your competitors.
A professional career is quite predictable. You will move from your standard on-the-job exposure to a more remote role (office-bound) with a list of clients and a plethora of on-site managers under your direct control. Deadline stresses remain and 3.00 am knock-off/starting times may be the norm.
And then there is the next level up. Projects might become more challenging and exciting but your role will evolve into the tougher stuff like finding new clients. Networking, strategic relationships and even marketing will then become the order of the day. This has its own stresses – if you do not deliver, you will start to smell!
One of the advantages of staying in this space is that you might get close enough to a client to be taken on board as their CFO. This is a delightfully comfortable way to transition into the corporate world as you walk in with all the important relationships intact and you don’t have to prove yourself. And, of course, the financial rewards, coming in at that level, could be tasty.
One of the significant disadvantages of staying in the profession is that there is a lot to keep up with. Not only are the laws and compliance constantly changing, there are a number of high-end egos to deal with. There is pressure to rise above and make a name for yourself. It is a space of expertise and you will be up against the best. If you are technically inclined, it is a great space to be. But it is highly competitive and, if you don’t make it, you could be left with a career of mediocrity.
The disruption facing this industry is fascinating. Between artificial intelligence, virtual reality and block-chain, there are some dramatic changes coming. How this will affect the profession is unclear at this stage but it will be significantly disruptive. You can be sure that there will be a number of jobs under threat!
- CHIEF FINANCIAL OFFICER– Financial Management
If your inclination is to become the CFO, the place to start is a vanilla financial management role. As far as employers are concerned, this is the most popular and sought-after CA role.
The requirements are relatively basic and on-the-job training is usually available. This will guide you through the transition into the commercial world with the minimum amount of pain.
Big company experience is advisable as it enhances your technical skills while giving you the opportunity to grow yourself as a team player and manager.
Your functions will include:
- Getting the monthly accounts out on time.
- Preparing reports on major budget-to-actual variances.
- Authorizing creditor payments by reviewing supporting documentation.
- Ensuring that the ledgers are tidy. Checking (not doing) the monthly reconciliations is part of this and usually you will be required to sign off on this process.
- Becoming involved in improving the control systems. This might arise as a result of shoddy system maintenance, rapid growth or just simply following up on internal or external audit reports,
- Dealing with day-to-day staff issues and queries.
- Reviewing critical monthly reports including stock and debtors’ age analysis.
- Liaising with the external auditors and fulfilling their requirements in order to achieve a clean and efficient audit within budget.
- Assisting with the budgeting process, mainly collating the detail.
- Preparing various financial reports to be included in the monthly MANCO/EXCO Packs.
- Verifying VAT, PAYE payments and other tax queries.
- Application of IFRS where applicable, as well as analysing and implementing any new changes.
- Involvement with health and safety regulations
- Assessing matters relating to the Labour Relations Act
- Liaising with bankers and dealing with queries
- Liaising with attorneys and assessing legal agreements, usually property leases, financial leases and operating leases.
The benefit of taking on such a role is that you get to understand the business from the bottom up.
Your progress will depend on how you handle yourself. The cross-relationship issues between your boss, colleagues and your own staff is an important part of your development .
Remember that you are under continuous scrutiny – if you feel you are not getting anywhere, you probably aren’t.
Get help! Do not be shy to approach your coach/mentor – it will help you to get to the next level much quicker. Leave it to fester and you will become more despondent and depressed. If your company does not offer internal coaching, find yourself a good coach – it’s worth it!
The big advantage of doing the financial manager role is that you will start to learn how to manage people.
Remember that the career path that you have chosen is to become the CFO.
Once you have your team running well you are ready for the next stage. This is about shedding your skin as a manager and emerging into an executive.
This is a study on its own and is not for this article. But if you are on the CFO track, in order to progress to the next level, you will need to learn how to become an executive.
- CHIEF EXECUTIVE OFFICER– Operational Management
Whereas the financial manager role is about dealing with the historical aspects of the business (presenting the results for the month/year), the operational CA is about dealing with predictive aspects – what is going to happen to the business going forward.
Sometimes this position is termed “Special Projects” and involves working with a number of issues:
- Assessing new strategies – for example should the company outsource its distribution function or should it put its staff on a pension scheme and if so which one? Assessing a new IT system could also be part of this process. The most common function, at the moment, is centralising financial functions into one single shared services division.
- Reviewing existing contracts with the intention of reducing costs. This might include reviewing the company’s insurance policies or obtaining quotes for a new auditor.
- Due diligence reviews on possible acquisitions
- Looking at new forms of finance.
- Forecasting projected profits and cash flows. This would include developing complex financial models with built-in stress tests.
- Investigating possible income tax opportunities.
- Developing restructuring models which might include closing divisions/factories. This would include the execution of the final decisions meaning partaking in the disposal process, retrenchments and vacating properties.
- Review legal documentation on a number of different topics. Usually complex financial arrangements or acquisition contracts would form part of this process.
- Developing and maintaining governance issues, specifically around the application of King III.
- Dealing with treasury issues and bankers including FOREX, FECs and interest rate swaps.
It does sound rather exciting but it has one significant drawback – usually you do not have a team of people reporting to you and you miss out on the invaluable managementexperience that is part of the Financial Manager’s role.
It is important to note that one of the most valuable aspects of personal growth is developing relationships. This role gives you a wider spread of contact and you gain invaluable experience in building connections with a variety of stakeholders. You are exposed to more aspects of the business than the vanilla financial manager largely because you are ‘out there’ a lot more.
Networking is fundamental to developing yourself from this base. Always remember that it is not who you know but who knows you. Be sure that important people both inside and outside the organisation know who you are.
There is a subtle but important difference here – strategically it’s about introducing yourself to people in such a way that they remember you!
There are two important things to note about this role:
- Being more operational, the role will require you to behave differently to what you are used to. Predicting the course of the business is strategic and will require reading more and being willing to volunteer to step upto new challenges all the time.
- Your opinion does matter– the more comfortable you are with expressing it, the better your prospects going forward. If you struggle to get your points across, get yourself some coaching!
- FINANCIAL SERVICES PROFESSIONAL
This is a broad heading which encompasses:
- Banking and related financial services
- Mergers and acquisitions
- Private equity
- Asset management
I am not going to go into a lot of detail about this save to observe that these are specialised areas. Once you choose to enter into a career in this space you are pretty much locked in.You will also find that management experience is limited, as the management structures are usually flat and you are unlikely to have a large team reporting to you.
Furthermore, it is normally a position with a large multinational organisation employing thousands of people and there are a lot of CA’s to compete with.
Competition is not a bad thing – it’s just political and has all the complexities of a mega organisation that takes much time to change – you will be very much a small fish in a big pond!
My view is that you either love it or hate it.
But you will get the opportunity to network a lot and, if you like that sort of thing, then this could be the place for you.
Fund/asset managers are a new breed of professionals that have emerged in the more recent past. Investment instruments, such as unit trusts and hedge funds, have become lucrative financial products.
CA’s are particularly suited to this industry because of the analytical financial skills. There is even an advanced postgraduate course that you can take to enhance your skills. Known as the ‘Chartered Financial Analyst’ (CFA), this qualification is the jewel in the crown of academic achievement. Considered to be extremely difficult, it is highly regarded especially when coupled with your CA(SA) qualification.
This is a highly specialised field. You are either in or out – although you could veer off into private equity or venture capital as you mature.
Again, management experience is limited as reporting structures are flat.
- INTERNAL AUDITOR
Although internal auditing has been around for many years it has not been particularly favoured by CA’s. One of the reasons is that it is too similar to auditing and is usually considered to be technically uninspiring.
This view is changing as companies are being challenged to assess their risks more carefully and supply the Board (via the Risk Committee) with assurance that material risks are properly identified and mitigated.
Traditionally, internal audit has been nothing more than the extension of the compliance auditing of the external auditors. This is illustrated by its accountability to the Audit Committee. This is changing and, with the advent of Integrated Thinking, the internal audit role could emerge as a much more sophisticated part of financial management. The CA professional has the ideal skills to play an executive role in this process.
- ENTREPRENEUR
If you have courage, energy and few responsibilities, this is the way to go. This is especially true if you have a passionate vision for changing the world.
But beware! This move is not for cowards.
Be prepared for a bumpy ride and double all the estimations of your forecast capital requirements. It’s lonely at the top – especially if you are a one-man operation!
Most CA’s will say that they ultimately want to go into their own business. It’s not that easy and there is very little that you are taught at university that will help you be an entrepreneur. It is a whole new set of skills, the most important ones being staying power, positive expectations and a cheeky forward attitude.
It is also quite sobering to note that entrepreneurship is all about marketing and sales.Everything else pales into insignificance. Now that is something we are definitely not trained for!
The advantage of this route is that you are your own boss from the outset. This is extremely liberating. But do not make the mistake of thinking that it is easy. It most certainly is not, and the hardest part is working with yourself, your despondency and your tenacity.
But the one thing is that no-one will ever retrench you and you will always have the last say.
And, if you are lucky, you will create wealth!
- PROFESSOR
Sometimes, as CA’s, we forget that this interesting career path may be substantially rewarding.
I am reminded of my earlier years, as an audit manager, where one of the article clerks on our team was seriously, in my opinion, unsuited to the accounting profession. To my surprise and amazement, he rose to become one of the top professors and academics in this country and continues to be a major contributor to the CA profession.
Being academic does not confine you to the corridors of educational institutions. Most of the bigger auditing firms have technical departments where one can become involved in research and lecturing.
If, after this, you are still undecided, stay where you are – as I said earlier, moving around may contaminate your CV.
I usually advise my clients to take the vanilla financial management role, as a start, as it gives the best grounding and the best management experience.
Although this might sound self-serving, I strongly recommend that you get yourself a coach/mentor. You will have the opportunity to discuss your thinking with an objective person who can assess your situation without dragging in judgments and baggage.
Some coaches use psychometric testing to assist with this process. Personally, I used to be against these methods. But, recently, I did one on myself as part of a coaching course – I was surprised to find that it confirmed, in a very positive way, my strengths and weaknesses. Such processes can be valuable.
Making a choice of which career path to follow is not an easy process. So if you are struggling with it be assured that you are not the only one facing this dilemma. Be patient.You need to find your groove.
But do not ignore your passion.
Again, if you are uncomfortably undecided use the services of a good coach – it will be a worthwhile investment!
Happy hunting.