First things first: what’s corporate finance? This is everything to do with rising the capital (cash or assets to invest) the company needs to undertake projects and increase its overall value.
Corporate finance in accountancy then mostly deals with companies, rather than public finance which deals with charities and public sector organisations; though they may have some dealings with public finance when it comes to some merger or acquisition deals.
Accountants in this areas are employed in-house in the finance department of a company, or else at a specialist accountancy firm or professional services firm. In-house roles offer the opportunity to specialise in one particular market and the interests of one or a group of companies alone, whereas working for an accountancy firm or professional services is the chance to work with companies from a much wider variety of industries.
The accountants’ role in corporate finance
Corporate finance accountants, also known as reporting accountants, will carry out financial accounting. This involves gathering, preparing and creating reports on the company’s financial information for individuals and organisations outside of the company who need to know the ins and outs of what’s going on with the books. These reports go out to official regulating bodies and stakeholders – those with interests in the company for their own reasons such as investors, employees, suppliers and clients.
Reporting accountants in corporate finance also focus on transaction support. They could work on behalf of the company who is planning to buy or invest in another. These specialist accountants carry out what’s known as due diligence tasks. These are the detailed checks on the financial information of the ‘target’ company – the prospective investment or purchase, carried out to ensure it’ll be a financially secure and ultimately profitable deal. No one wants to invest in a rotten apple! Accountants on the sell side will ensure these accounts are in order and help to provide the right documents on request.
Due diligence can take weeks, even several months for the biggest transactions. Correspondence with various other professionals, such as representatives of the target company like investment bankers and lawyers is also usually necessary in this process. Therefore, patience, an analytical eye for detail and great organisational and communication skills are all essential characteristics of a reporting accountant.
The types of transaction corporate finance accountants may support include:
- Mergers & acquisitions (M&A) – buying, selling or merging companies
- Raising capital by issuing debt – for example selling bonds, which allows the company to borrow money and pay back at later intervals according to terms in a contract
- Flotation – a private company switching into a public company by issuing shares on the stock market (selling portions of ownership in itself) for the public to purchase, which can provide another source of financing for projects etc.
- Existing public companies selling (issuing) equities.
- Capital generation for start-up companies.
- Demergers – when two joined companies go their separate ways and become two separate business entities (how poetic…).
- Raising capital for specialist funds.
- Refinancing and restructuring deals – for example when old loan agreements are replaced with new ones, or elements of a company replaced with a new structure.
Accountants specialising in corporate finance usually have a professional qualification or two to their name. It’s common to study for the ACA, AAT or ACCA qualifications alongside work as you begin life as a trainee accountant.
School leavers and graduates from any discipline have a shot at getting into accountancy and specialising in corporate finance. School leaver programmes and graduate schemes provide a wide variety of experience in a number of accounting projects and areas, and the option is there to develop a specialist area in this field, with the opportunity to international travel and tasty salaries too.