The role of the finance function in Indian company is evolving to include new responsibilities in addition to the traditional limited to the remit of cost accounting, according to a survey by the Institute of Management Accountants (IMA), the Institute of Directors India and MyCFO.
The survey received 169 responses from finance and accounting professionals working in midsize (100 to 999 employees) and large (greater than 5,000 employees) businesses.
The survey found that the traditional limited remit of the cost accountant is starting to be replaced by more expansive value creation-oriented strategic partnering role.
In some areas like statutory reporting, practices in India still more closely resemble those in emerging economies with Indian finance professionals spending 20% of their time of statutory reporting, while Chinese professionals spend 25% of their time on this task, in contrast to finance professionals globally who spend 14% of their time on this task.
In other areas on the other hand, practices in India are more closely aligned to global practice. For example Indian finance professional spend 17% of their time on strategy development, when globally finance professionals spend 16% of their time on this task. In comparison Chinese professional spend 8% of their time on this function.
“Indian companies are entering an exciting new world—one characterized by rapid economic, social, and political change. While planning, forecasting, and providing business insights are high priorities for the finance team, India’s complex tax and regulatory environment requires substantial focus and resources, which reduces their ability to focus on providing business insight,” IMA vice president of research and policy and author of the study Raef Lawson said.
Newer finance responsibilities such as forecasting, planning, and strategy are emerging priorities, and newer management accounting techniques are being adopted, he added. “Yet Indian companies, like their counterparts elsewhere in the world, under-prioritize practices that are most effective in yielding better business insight.”
The study is available here