7 Key Skills to Look for When Hiring a Financial Analyst
Besides “speaking spreadsheet”, what other proficiencies should you look for when seeking the right candidate?
Financial analysts are more than number crunchers who do calculus problems for fun in their free time. Leveraging real-time financial data to forecast the future, a great analyst will help with valuations, market fluctuations, and cash flow management to identify trends in business and provide insights that inform key business decisions. Hiring the right financial analyst is crucial for growth.
Generally, financial analysts should have exceptional Excel or Google Sheet skills. Any analyst worth their salt should be able to “speak spreadsheet” and keep all of your financial reports organised. But what other proficiencies should you look for when seeking the right candidate?
Here are some of the essential skills that top financial analysts possess.
1. Numbers Storyteller
Top-performing financial analysts are masters in reviewing and understanding large reports of numbers – and then distilling them down to communicate insights gleaned from the data. They communicate these insightful conclusions clearly and concisely, so everyone can understand them.
As a “numbers storyteller,” their insights are essential for any Chief Financial Officer (CFO) or business leader to draw upon. They tell your company’s story through data and analysis. Many financial planners have aspirations of moving up to executive financial positions such as CFOs, and being a “numbers storyteller” can be an essential skill for just such a role.
2. An Ace with Accounting
The best analysts are also great accountants. They keep track of your books as a core function of your business. Accurate and up-to-date accounting functions are crucial for cost planning, measuring economic performance, and gaining information to make important business decisions.
3. An Enterprising Spirit
An underreported skill that great financial analysts have is that they think like entrepreneurs. They study key performance measures and are always brainstorming ways to increase profits and grow market share. Good analysts keep up with constant market fluctuations and can see the “big picture” for long-term business growth and scalability.
When hiring the right financial analyst, a can-do attitude and an enterprising spirit are major selling points for CFOs to look out for. They welcome feedback and are always looking to improve their performance, seeking frequent input from their leaders.
4. Accurate Business Valuations
Accurately estimating the value of an owner’s interest in their business, also called valuation, is another critical skill of an effective financial analyst. This is one area where being a “numbers storyteller” comes into play. The best, most accurately estimated business valuations tell a story and consider the whole package.
In the popular American investing show Shark Tank, investors consider the whole package of pitches from business owners and entrepreneurs seeking funding. This package includes the numbers but also includes the story of the entrepreneurs themselves. Although the numbers reign supreme, the true craft lies in bringing these numbers to life through compelling stories. This is what sells shareholders and investors into doing business with you.
If you need any convincing on this front, just think of the estimated $20 million that American billionaire entrepreneur Mark Cuban invested in startup businesses on Shark Tank; so persuaded was he by the power of the stories their numbers told.
5. Cash Flow Management
Did you know that an estimated 82% of businesses fail because of poor cash flow management? If your business is short on cash and struggles to pay suppliers and meet payroll, this could be due to poor cash flow management. A top-shelf financial analyst will identify potential cash flow management problems before they arise and offer ways to avoid them.
6. A Data Mad Scientist
The best financial analysts are always up-to-date on industry and niche market changes and their local economies. They will understand how the actions of regulators and your competitors will impact your business. If this applies to your company, they will also help with the expectations of shareholders and stock analysts. They use this data to create financial models that track company performance (quarterly, yearly, etc.) and predict possible outcomes. These models help you estimate the costs of new projects and develop strategic plans.
The best financial analysts are tech-savvy. They understand how to use technology and the latest programs to create key financial models, share in-depth presentations, and crunch numbers. Their techno-fluent proficiencies can play a vital role in the performance and improvement of your financial team.
Always Hire Certified Analysts
When you’re in the market for expert financial support services, always hire analysts certified through world-class institutions, such as the Corporate Finance Institute.
If you’re ready to see what a skilled financial analyst can do for you or your business, visit www.theroom.com to access a pool of highly motivated, tech-savvy analysts – all of whom are certified through the Corporate Finance Institute. Don’t miss out on the opportunity to tap into their skills and insights, enabling you to make better business decisions, reduce your costs, and gain visibility into your financial operations.
The ROOM is home to a highly specialised community of agile digital talent, connecting individuals and companies across the globe with the skills and resources they need to future-proof their teams and thrive in the new world of work.