The advancements in business strategies and technologies necessitate that chief financial officers (CFOs) adapt to increase revenue, overcome external pressures, and put their business ahead of the curve. This is often easier said than done, but there are a few things CFOs can do to meet the challenges of modern finance.
Embrace technological advancements
The need for accurate, timely data has spawned advancements in business technology, including financial management solutions. CFOs need tools that will make data analysis, forecasting, budgeting, and reporting easier, which is why they must implement enterprise resource planning solutions (ERP) like Sage Intacct and Microsoft Dynamics 365 Business Central.
Modern ERP systems provide CFOs with full visibility into relevant data and real-time access to financial and operational KPIs. With data gathered in a central location, CFOs can make informed decisions as needed, which is extremely important in a fast-growing business. Such visibility also gives way to process improvement, long-term savings, and more.
New trends and technologies have broken the mold of the traditional CFO’s role. In addition to managing the company’s overall financial strategy, they must also be more tech-savvy and maximize the accounting solutions presented to them.
A wider understanding of automation tools should help CFOs and their team generate accurate reports, close the books quickly, and produce actionable insights. It would also help to read up on new tech developments so they can make more informed IT investments.
Build skills in other areas of the business
The CFO’s responsibilities have extended beyond finance. CFOs have learned to turn to technology for their analytic, decision making, and business strategy development needs, among others. Their tasks are evolving, so they need to acquire other skills to add more value to their role.
A study conducted by McKinsey & Company shows that on average, there are now five functions other than finance that report to the CFO, which include risk management, regulatory compliance, M&A transactions and execution, IT, and M&A strategy. In some companies, CFOs manage cybersecurity and digitization, which proves how diversified the role has become.
Balance operational and strategic duties
The modern CFO should be as efficient with their strategic responsibilities as they are with their financial priorities. In a study conducted by Ernst & Young, a majority of CFOs surveyed said they anticipated being asked to take on more strategic duties alongside their operational responsibilities.
Let’s say your company is contemplating an ERP system implementation. The cost will impact several departments, and the CFO must be the first one to point these out and determine what adjustments need to be taken to ensure a smooth deployment and onboarding. Their responsibility is to develop an implementation strategy and get everyone’s approval while keeping an eye on the budget.
Assume an investor’s mindset
CFOs must widen their risk assessment skills along with their technical knowledge. It would help if they integrate an investor-based mindset into their management style to develop capital discipline. Exercising good judgment in how much the organization borrows, raises, and spends, helps ensure worthwhile investments and deliver on shareholders’ expectations.
WhiteOwl is your CFO’s partner in fulfilling their financial and nonfinancial duties. We understand their role and how it impacts the entire organization. Contact us today, so we can help them manage the challenges their job entails.