Blog/Finance February 11, 2022

The Five Hats of a Modern CFO


CFOs play a fundamental role within the organization as they are tasked with duties that support all business units and drive enterprise value. They are finance experts and strategic business leaders, with skills and knowledge to solve challenges beyond the finance function. Their central role in stabilizing and positioning organizations for long-term growth calls for them to wear many hats throughout their careers. Through times of volatility and change, CFOs can influence the company’s resilience by solving present challenges while making sure their actions align with the company’s long-term interests.

Here are the 5 Key Initiatives for Finance Leaders to Secure Their Organization’s Financial Future: 

1. Advocating for the latest automation

Given the organizational challenges brought by the pandemic, digital transformation has quickly become a priority across industries. Finance teams need improved accounting processes and the latest tools for better decision-making and business agility. A recent Forrester survey found that 74% of financial executives believe in the importance of real-time tracking for cash inflow and outflow. Yet only 12% have automated their accounts receivable and accounts payable processes, as most accounting departments still have siloed processes. Companies who want to lower costs and get ahead of disruptions must start by automating their legacy systems. CFOs are the change agents of the C-suite; they are equipped to support their business by streamlining and automating finance processes. With the power in their hands, CFOs can effectively design and implement a strategy for automation that will keep their organization ahead of their competitors. 

2. Employee retention and upskilling current talent

During what economists are calling the 'Great Resignation', we're seeing unprecedented numbers of professionals move within or leave the workforce. A recent survey by PwC found that 88% of executives said their company was experiencing higher-than-normal turnover.

The phenomena of talent moving from their positions is heavily impacting organization’s operations and financial viability. For CFOs, it is more important than ever to prioritize employee retention and upskilling internal talent. With this in mind, organizations can increase business efficiency while reducing costs related to employee turnover and training. CFOs are in an ideal position to approve costs for supporting internal talent. To keep talent, leadership must offer opportunities for true career growth, fair compensation, and invest in improving work satisfaction. By supporting these investments, CFOs can help ensure their fellow business leaders have access to fully-staffed, skilled teams.

3. Strengthening the supply chain

Given their unique role, CFOs also have the power to support supply chains by shortening invoice payment timelines, improving vendor relationships, and partnering with their chief supply chain officer (CSCO). CFOs and CSCOs working together can build supply chains that are efficient and appropriate for their industry to drive core business strategy. The finance team is incredibly skilled at analyzing sets of data and financial forecasting. The CFO and CSCO can improve the company’s liquidity by improving working capital management. From inventory planning to optimizing payments for all parties, together they power their supply chain to create enterprise value.

4. Building a strong FP&A function

Financial Planning and Analysis (FP&A) is critical for strategic decision-making. Enabling the FP&A team with the latest technology will allow for more accurate reporting, forecasting and financial modeling. Recent survey data shows that 76% of companies intended to invest in specialist software for corporate planning, simulations and scenario analysis. Through their profound financial expertise, CFOs have the ability to strengthen their organizations through the development and direction of strong FP&A functions. FP&A experts should be viewed as business partners who advise the CFO, providing essential insights for agile decisions and growth. One of the most direct ways finance executives can influence the organization's success is through structuring a strong FP&A function. 

5. Supporting critical business decisions

The decisions made by CFOs are key to the success of any organization. As trusted guides to the CEO, they are in an ideal position to drive their organizations by strategically structuring company finances. CFOs can use their expertise to ensure that critical decisions are made in the most efficient, cost-effective manner that best reflects the needs of their organization.

Despite numerous job functions, the CFO and their finance teams are most capable of supporting the organization with insightful guidance. In 2022, as uncertainty prevails in an ever-changing market, it is imperative that CFOs continue to implement forward-focused strategies into their business models. By delivering value now and into the future, CFOs can secure their firm’s financial position to overcome challenges and capitalize on opportunities ahead.


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