From Accounting to Accountability: The Pressures Affecting CFOs Today

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Today, CFOs are expected to do far more than number crunching. They are now a strategic partner to the CEO that contributes and provides guidance on company innovation and efficiency.

They are expected to turn regulatory burdens into a competitive advantage and give strategic guidance on areas, such as growth. A 2016 McKinsey study found on average, five functions other than finance now report to the CFO, ranging from risk and regulatory compliance to IT and cybersecurity, further highlighting the expanding role of the CFO.

In a recent survey of CFOs by professional services firm Ernst and Young, almost 70% said they were spending more time on providing analysis and insight to support senior leaders and decision makers than they were five years ago. For today’s CFO, their role is no longer simply operational—whatever keeps the rest of the business awake at night will also keep them awake.

Due to the changing role of the CFO—moving from a traditional accountant role to a strategic business advisor, there is more pressure than ever before from a wider range of sources. This is something CFOs must address as part of their day-to-day role.

What is currently causing the biggest disruption? Factors such as external economic uncertainty and increased regulation, internal challenges over data responsibility and ownership and attracting and retaining top finance talent are top concerns for CFOs.

When a new IT strategy that impacts multiple departments is being proposed, a team made up of the offices of the CFO and the CTO should work together from the outset to assess the benefits and risks

Arlene Wherrett, VP and Managing Director,
Sage Asia

Tackling tension through collaboration

Getting ahead of changes is one way to mitigate the disruption. For example, rather than being pessimistic about how potential changes will affect your business, CFOs should remember that disruption often comes hand-in-hand with opportunity. The business that can position and prepare themselves effectively for these changes will gain a competitive advantage.

However, with a constant emphasis on compliance, it can be tough for the CFO not to be seen as the negative voice at the table when the Board wish to implement a strategy that could be seen as risky or of the new order.

Collaboration is key. When a new IT strategy that impacts multiple departments is being proposed, a team made up of the offices of the CFO and the CTO should work together from the outset to assess the benefits and risks.

Once signed off by the board, taking this collaborative approach will make it easier to develop a strategy to engage colleagues appropriately.

Effective colleague engagement will foster an understanding of why change is needed and the role they can play in making the strategy a success. Colleague engagement will also ensure that adoption of new systems across the business runs as planned.

Leverage technology to become more productive

Research by Deloitte found that fear of change is a key reason why CFOs are not leveraging on automation and technology to drive productivity growth, with 38% of CFOs surveyed worrying about employee resistance to working with non-human colleagues. This will need to change, especially as we transition towards a digital economy.

With the OECD forecasting that GDP growth in Southeast Asia will outpace the global economy (5.2% vs 3.2%), local businesses will focus their expansion efforts towards the regional economy, but that comes with additional administrative and operational workload, such as taxation and payroll.

The deployment of technology will be crucial in helping businesses streamline processes to focus on growing revenue.

Our Sage productivity tracker for Singapore for instance has estimated that already in 2019 businesses in Singapore have lost nearly S$1.5 billion worth of productive time due to administrative tasks.

The investment in technology now will more than pay for itself in the future as businesses accrue their returns on investment through improving efficiency and productivity.

In addition, technology can also be used to observe patterns in previous customer and market activity and using that understanding to plan for the future. For example, predictive analytics, which uses artificial intelligence, can be like having a crystal ball into the future health of a company.

It can give the CFO the scope to get ahead of any potential challenges, such as staffing issues or the need to invest in more infrastructure or drive into new markets.

Research by Deloitte found that fear of change is a key reason why CFOs are not leveraging on automation and technology to drive productivity growth

Building strength in depth

As the business landscape continues to evolve, so will the challenges CFOs have to navigate.

The demands on the CFOs time and attention will also increase, with responsibilities reaching beyond the finance department. Having the capability within the team to allow them to delegate responsibilities to the rest of their team will be crucial.

With the right team and support in place, CFOs can handover tasks to other team members with the right skillset, freeing them to focus on providing advice and leadership. With this in mind CFOs must not only invest in developing their teams, but they must also take a forward-thinking approach to recruitment.

Employing and equipping team members with the skills and attitude you need now and in the foreseeable future can be an effective way to add value to the wider business.

For CFOs to be effective and add real value in today’s new business landscape, they’ll need to understand the impact of the role on other business functions and be proactive about how they can use their experience and skillset to support others’ goals.

Looking beyond the pressures traditionally associated with their function to understand what the landscape of the future might look like.

By taking the right approach to team structuring and investing the time to understand customers and market behavior, the CFO will be able to position themselves as a valuable influencer today and for years to come.

About the Author

Arlene Wherrett is VP and Managing Director at Sage Asia.

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