It’s an interesting, exciting and somewhat challenging time to be at the head of the finance department. In only a few decades, you’ve seen the role evolve. To get where you are today, you’ve helped your firm weather recessions, led your department through an evolving list of regulations and compliance challenges, and have built a team despite a shortage of talent. In 2020, you led that same team through a global pandemic and the economic fallout that ensued.
As a modern CFO, you have a bigger role than ever in the future of the organization. More departments answer to you and you’ve taken on new responsibilities, moving from ‘head number cruncher’ to core influencer and organizational catalyst.
Today’s Finance Chief: Balancing Traditional Roles with New Responsibilities
Today’s CFO understands how to create value for the organization and has taken a more active role in the operations of the business. Whether you’ve been in this position for 18 months or 18 years, you know it’s a position that continues to present you with new challenges, opportunities and responsibilities.
Looking back just a year or so ago, and this was already predicted— EY notes in their DNA of the CFO study that parameters of the job are more blurred than ever. And five years prior, Deloitte introduced the four faces of the CFO model. Both of these still hold true: the role of Steward, Operator, Strategist and Catalyst have never been more important than they are today.
The roles of the finance department and the Chief Financial Officer (CFO) have been elevated and broadened, a trend that will continue moving forward. If you haven’t seen it already, plan for more focus on operations and leadership, higher risk management expectations and a bigger role in IT decisions and digital transformation leadership.
What Will be Expected? Overcoming Challenges in 2021 and Beyond
Knowing just how fast paced the business landscape is, the finance department needs to be more agile than ever. Information needs to be available at your fingertips, security and risk management need to be under control and your team needs to be prepared to make decisions. Here are just some of the issues and questions you will need to face in the coming years:
1) Having the Right Information Available – Before You Need It
As little as a decade ago, companies could rely on standard process for getting the information they require to make business decisions. Need a report? It’ll take a bit of time, but you’ll have it by the end of the week. Need to run budgeting and planning? It’ll require a few emails, but it gets done. This is no longer enough.
Getting set back a couple of days is detrimental. This gets even harder because, depending on how technologically mature your industry is, your competition could be leaving you behind. Now more than ever, CFOs are expected to have real-time numbers at their fingertips and generate reports that offer insights on that data.
For today’s finance leaders, the right information needs to be available before it’s needed. Automation, integration and business intelligence need to combine in a user-friendly dashboard that presents the right information to the right people at the right time.
With this, you can understand, report and discuss where your company stands with ease, ultimately making faster, smarter decisions.
2) Making Sure the Information You Have is Accurate and Auditable
Accurate internal and managerial information is expected; accurate and auditable financial information is critical. Auditors of financial statements dream of quick, easy and uneventful audit engagements just as much as CFOs do and being able to provide a clean and accurate financial statement will make this process easier for everyone involved.
Auditability depends on a business’s financial recording policies and procedures, effective internal controls and the willingness of a company’s executives to provide its external auditors with requested data and information.
3) Solving for Compliance Challenges
Audits are hard enough, but ensuring compliance is another issue altogether. Today’s companies must be more vigilant against the threats to their financial solvency due to violations of laws, regulations and evolving industry standards.
From revenue recognition to lease management, accounting standards have become more robust and challenging. Keeping up with the challenges these present requires effective internal controls, complete accuracy and the same efficiency expected by internal stakeholders and auditors.
CFOs must ensure that the necessary infrastructure is in place to provide all stakeholders—including IT, HR and C-level executives —the tools they need to meet compliance requirements and still perform their duties effectively.
4) Keeping Your Data Locked Down
You don’t need to look hard to find examples of companies that have been impacted by technology failures or data breaches. Risk management is becoming an even bigger part of the CFO’s role. In a report from WSJ and Coupa, 66% of CFOs say they are now focused more heavily on technology, while 59% have noted more diverse types of risk management. To be successful in managing risk, CFOs must find the balance of their forward-looking and backward-looking responsibilities.
With risk management among the highest priorities for CFOs, knowing where the security gaps exist in your organization is at the top. As the primary individual responsible for your company’s financial and other sensitive data, you, the CFO, are on the front lines trying to keep your data safe.
To address this, you need to work with those in the rest of the organization to identify these gaps, take steps to educate employees, reevaluate access rights to sensitive information and look for ways to improve.
5) Knowing What’s Next
As a CFO, you already know that part of your job is to predict the future—you do this in every single budgeting, planning and strategy session. However, when paired with an evolving role that includes technology investments, operations decisions and risk management, you will need to lead digital transformation initiatives.
We’ve discussed the importance of digital transformation initiatives in the past, and have looked into the role of technology to make this a reality, but for the CFO today, finding out what technological advancements can make his or her team’s job easier will set the company ahead and facilitate the move into the next decade.
One of these areas for improvement is an evolving business management solution that incorporates business intelligence, machine learning, artificial intelligence, and more to deliver the right information and increase the speed and accuracy of decisions.
Start With the Right Technology Partner
As your decisions become harder to make, you can’t rely on outdated, underperforming, legacy applications. If you’re looking to understand how the right technology can deliver for your business and make your job as a CFO easier, reach out to us. At NexTec Group, we have over 26 years’ experience implementing Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Business Intelligence (BI) and cloud software solutions. With deep industry expertise, we understand the challenges CFOs face and provide solutions tailored to their specific needs. Get in touch with us to now to learn more about how to ensure future success.