Five must-have capabilities for the forward-looking CFO

In response to the varied uncertainty of the past few years, forward-looking finance leaders are committing to modernising, and turning their departments into fully fledged business partners. The role is far more than number crunching – a good CFO strives to find solutions to some of the biggest challenges their businesses are faced with.

Wolters Kluwer works with thousands of finance leaders, both in the UK and Ireland and worldwide. This has given us an unrivalled view of the key traits finance leaders need to deliver leadership and insight at the point of need, navigate uncertainty and build resilience:

 

Automation where it’s needed most: close and consolidation

 

It’s impossible to become a strategic powerhouse when you’re bogged down in routine data processing. The monthly/quarterly/annual close and consolidation process is a case in point.

 

However, CFOs should avoid tinkering around the edges with automation if they want to get to the heart of the efficiency problem. Investing in multiple products to manage what should be a joined-up process or resorting to IT department custom-scripts won’t drive the efficiencies needed.

 

The close and consolidation system should be a seamless extension of the ERP and general ledger. Take inter-company transactions, for instance – one of the most resource-heavy elements of consolidation. Workloads are significantly reduced if the solution comes complete with intercompany matching, reconciliation and elimination built in. Discover how it’s done here.

 

Full visibility through next-gen integration

 

How to accurately forecast the operational implications of a proposed strategic initiative? If an operational change is under consideration, what impact will it have on the bottom line and across all departments?

 

Getting answers to these questions requires a complete view of the entire organisation, something that’s difficult to achieve if various strategic, financial and operational planning activities are scattered and siloed across the business in different systems.

 

The idea of aligning operational planning with the overall business strategy, often referred to as integrated business planning, is not a new one. More recently, we’ve seen the introduction of what Gartner calls extended planning and analysis (xP&A). It takes the concept of integration even further by bringing together all operational and planning use-cases onto a single platform, using a common data model.

 

For CFOs, this delivers a single, trusted information source, complete with the ability to mine insights from vast granular data volumes. It provides a holistic view of performance, while precise AI-driven forecasts enable foreseeing the impacts of decisions across all areas of the business. Explore what’s possible with xP&A.

 

End-to-end visibility for the entire supply chain

 

From pandemic-related outages through to sudden supplier price hikes, a very real butterfly effect means that a seemingly isolated event has potential implications across multiple areas.

 

In response, leading companies take advantage of finance-focused supply chain planning software that is integrated into an end-to-end corporate performance management platform. Spanning sales, demand, supply, inventory, production and capacity, all elements are connected. So, if there’s any change – however big or small – the strategic, financial and operational ripples can be seen across the entire integrated plan.

 

These early warning signs can make a huge difference with things such as optimising production schedules, reducing bottlenecks and controlling costs. It’s easy to see how quickly supply chain issues become cashflow issues that sit at the very heart of finance operations.

 

Strategising for the possible through predictive intelligence

 

For finance to become a go-to source of insight, it’s not enough to explain what just happened. It’s also necessary to be able to strategise for the possible and probable, and to map out the way ahead when multiple alternative courses of action are on the table.

 

Building directly on integrated data and end-to-end visibility, predictive intelligence supercharges the decision-making capabilities. A panel of finance leaders highlight on this webinar recording the importance of scenario planning and predictive analytics, integrated data universe, and using machine learning capabilities to “train” out-of-the-box predictive models.

These provide the ability to continuously update plans and develop increasingly accurate forecasts. Through data integration, calculations and rollups instantly refresh data, analytics and forecasts via a continuous feedback loop. In just a few clicks, finance can generate trustworthy what-if scenario models based on different variables.

 

Turning ESG compliance into a competitive advantage

 

It’s natural to view any new reporting requirement as yet another compliance issue to overcome. Environmental, social and governance (ESG) is a prime example. While the new regime remains a work in progress, the direction is clear: regulators, investors, customers and the wider community alike will expect greater accountability, transparency and ever-more granular information.

 

Fortunately, forward-looking leaders can not only meet compliance but step ahead of the curve with ESG and sustainability performance management software. With streamlined data collection, workflow, calculation and KPI disclosure all underpinned by a single source of trusted data, organisations can comply with ESG-related standards both now and as they evolve in the future.

 

The true value of this approach goes way beyond tick-box compliance. It gives the ability to drive sustainable strategies and tap into the wider benefits of being able to present a credible ESG proposition: attracting new customers through stronger social credibility, less waste and emissions, lower costs and an enhanced reputation. Discover how to transform ESG compliance into a competitive advantage.

Conclusion

 

Changes that affect businesses in significant ways can surface anytime, recently more than ever. To lead successful organisations, CFOs need an innovative and proactive approach: embedding a culture of continuous improvement built on investment in people and technology. Software has long existed to support evolving responsibilities, but the skill of the true finance leader is to take the holistic view, to see the big picture. Rather than piecemeal tools and point solutions, untapped opportunities lie in deploying software that is fully integrated and perfectly aligned. Tomorrow is the great unknown, and today’s finance leaders are preparing by building integration into the very heart of finance operations.

 

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