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Key Skills for Adding Value Part 1: The Data - Validation and Control



This is the first of six blogs that look at how to transform a company’s Finance function into an effective business partner and provider of value through training. They drill down on a blog posted October 21st on Proformative called “Closing the Skills Gap in Your Finance Team.” This training is focused on foundation skills required for adding value. Although these skills have a Finance wide expectation they are of especial relevance to existing and aspiring management accountants.   These skills make up a critical and significant part of the foundation required of a management accountant. They should master all with authority.

The six blogs will discuss six interconnected skills. These skills are explored in more detail including relevant examples, handy frameworks and exercises that can be adapted to your business in the book, Bean Soup – Beyond Bean Counting – Steps for Lifting a Finance Function Skill Set Towards ‘Adding Value’. The first four skills are core to adding value – 1) The Data – Validation and Control, 2) The Client – Stakeholder Management, 3) The Product – Financial and Non-Financial Analytics and 4) The Value – The Strategic Plan and Financial Planning. The last two are not considered core yet still important for lifting the value of a Finance function. They look at Business Process Improvement and Risk Management.

At Radius Care we have taken the steps of ensuring all members of the Finance team have been trained in these skills and not just our management accountant. This includes the accounts receivable, payables and payroll team members. As a New Zealand Institute of Chartered Accountant Accredited Training Organisation Radius Care has a similar program run for mentoring our aspiring and ‘soon-to-be’ Chartered Accountants. The combination ensures there is a team wide understanding of value and my expectations of them as their CFO.



The objective of this training is “To provide a foundation for a Finance team to enable it to eliminate the risk of material error, avoid surprise and provide assurances the data integrity is correct and complete. This is for both financial and non-financial information.”


Are you hearing comments like the following?

“I’m never too certain of performance as Accounts keep getting the numbers wrong.”

“We’re not sure how much they owe us as Accounts are still trying to reconcile accounts receivable.”

“Accounts said, “It’s gone to suspense and will be reconciled at a later date.” What is that supposed to mean?”


Would you prefer to be hearing?

“Finance always provides numbers that are materially correct. I cannot remember when there has been an error or surprise.”

“It is great to be able to focus on the business performance rather than spreadsheet accuracy and whether it can be trusted.”


Validation and control is all about ensuring that all information and advice provided by Finance to its stakeholders is complete, accurate, consistent and prepared in accordance with the organisation’s policies and guidelines along with all relevant regulatory, accounting and control frameworks.

When providing financial performance data to key decision makers within an organisation, like the Board and senior leadership team, nothing spoils the credibility of financial information more than material errors. This can be distracting when trying to understand the performance of the organisation.



  1. Materiality

Why is materiality considered a skill required for adding value? Essentially it sets the expectation to not sweat the small stuff. Information is material if its omission or misstatement influences a business decision. If materiality is not considered there is a risk of slowing month-end, delays to important performance data and wasted resource for no economic benefit.


  1. The Control Environment

The following five step framework is helpful for checking there is a strong control environment in your organisation. Ensuring a strong control environment requires identifying significant accounts and understanding the transactions and processes impacting them and then asking “What can go wrong?” A strong control environment provides reasonable assurances nothing material will go wrong.


  1. Data Validation Techniques

For validation of the balance sheet remember that “every month is a year- end”. Ensure all balance sheet accounts are reconciled and reviewed regularly. Set procedures for the timing of substantiating to the source document or physical asset of each balance sheet account.

For validation of the Profit and Loss remember to “rely on your expectations”. Comparing the current month data to last month, the budget and the same month last year assists in identifying unusual variances and material outliers.



The next blog is on the second core skill – The Client – Stakeholder Management. This skill is the next step after ensuring our Finance team members understand and can demonstrate how to eliminate risk of material error, surprises and assurances data is materially correct and complete through effective validation and control.

Stakeholder management stresses that even with the most accurate, reliable and insightful financial information it accounts for little if it is not in the hands of the right individuals. These individuals are the stakeholders or clients of Finance and the key decision makers of the organisation. The Client – Stakeholder Management seeks to identify and provide a framework for proactively engaging them.



The content of this article is a  brief overview of skills that are explored in greater detail including relevant examples, handy frameworks and exercises that can be adapted to your organisation from the book, Bean Soup – Beyond Bean Counting – Steps for Lifting a Finance Function Skill Set Towards ‘Adding Value’ published by Finance Mechanics Limited (2013). You can find out more about the book at

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