Addressing the needs of the modern CFO

Darren Cran at AccountsIQ argues that the CFO’s real role extends beyond finance, and is integral to resilience and growth: but to deliver this they need to be supported by the right technology

 

Amid increasing interest rates, pressure stemming from rising energy prices and escalating risk in the banking sector, there is much occupying the attention of the modern CFO.

 

At the centre of an ever-expanding circle of responsibilities, the CFO is now expected to ensure business practices align with Environmental, Social and Governance (ESG) initiatives, navigate complex tax regulations, and increasingly becoming more responsible for digital transformation across the wider business.

 

And while the CFO’s traditional functions remain relevant, the real value of the role lies in other tasks, such as building resilience within the organisation and helping to set achievable and sustainable growth strategies – integral outputs which involve unifying all members of the board.

 

But to fulfil the key strategic functions and deliver long-term success, it’s essential that the CFO frees up the time for themselves and their teams to work on delivering these initiatives.

 

The new mandate of the CFO

While the role and responsibilities of the CFO continue to expand, at the fundamental level, accounting, reporting and statutory compliance are mission-critical tasks that will always remain within the finance department, and thereby, under the control of the CFO.

 

But these core activities are already taken for granted by CEOs and the rest of the organisation, and are already seen as the minimum deliverable requirement.

 

Because of this perception, it’s important that as much effort and expense is saved on performing these duties as possible, giving the CFO more time to use their skills to influence strategic decision making at the highest level.

 

The reality is that this is difficult when the organisation operates in multiple markets and in different currencies, or the finance team needs to consolidate accounts across several divisions. Month-end reconciliation can itself become a month-long process. These tasks can be complex, manual and mundane, which affects not only the performance of the business, but can also leave a fresh and willing team demoralised and demotivated after repeated exposure.

 

Finance leaders need to tame the time-consuming and energy-draining repetitive tasks to focus on the value-adding responsibilities being demanded by the CEO. This means analysis of strategic and non-strategic spending and understanding cost drivers. 

 

Often, assumptions on strategically important spending are mistaken, or are inherited from previous working practices that no longer match business priorities. It’s crucial that there is a joined-up approach from across the C-suite, so finance leaders can uncover areas to gain efficiencies.

 

Transforming the finance function through technology

Delivering a consistently high level of financial reporting that can impact business strategy requires time and skill, both of which are currently in short supply. Mark Hoban, chair of the UK Financial Services Skills Commission (FSSC) termed this not just as a skills shortage, but an existential skills crisis, no less.

 

But regardless of external conditions, business leaders need to transform the traditional finance function. When most of the time is spent collecting data, then too little time is spent analysing it and generating insights.

 

By automating mundane tasks, finance teams can take advantage of cloud-based software tools which provide fresh and accurate data. Through utilising modern technology CFOs can gain a complete end-to-end picture of the business, from one moment to the next, allowing them to orchestrate change within their own department and also across the business.

 

With complex reporting requirements fulfilled in a few clicks rather than through weeks of intense effort, the CFO will be able to drive change and innovation across the business. Moving to a data driven environment, can bridge the gap between fast and accurate decision making.

 

Today, many of the complex accounting problems have already been simplified with technology. Cloud solutions have been designed to allow the CFO to analyse carefully considered reports, rather than embark on a scavenger hunt to tie disparate data together into a coherent story.

 

This undeniably gives the CFO scope to develop the more strategic aspects of the role: to use the insights gained from the financial data to provide more nuanced input into business decisions, to be able to advise on growth strategies, deliver forecasts of projected market conditions, providing the unique insight delivered by reporting to enhance the experience learned from poring through the raw numbers.

 

Changing for the good of the company

While the transition from paper-based accounting to online tools was a drawn out process, finance teams can ill-afford a similar delay right now in moving to modern technology that’s fit-for-today.

 

With routine tasks delivered via automation, hours that would otherwise be spent on data entry have been saved. This gives progressive CFOs the opportunity to redeploy individuals on projects that better fit their skillsets. For example, finance employees can work more closely with colleagues in the supply chain, sales and acquisitions departments. Improved and more accurate management reporting, through less manual error, also represents a step change in operations.

 

The goal of the CFO to deliver true strategic value will only be achieved when the reporting and accounting processes have been taken under control. CFOs can then act as key advisors to CEOs and help decision makers make the right choices. With the correct solutions implemented, the CFOs increased responsibilities will only bring more benefits to the business.

 

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Darren Cran is COO of AccountsIQ 

 

Main image courtesy of iStockPhoto.com