Every CFO is a champ in 2021. They wear different hats ranging from strategist to decision makers. In 2020, when the pandemic took over the world we have known so far, CFOs were hit by meteroic challenges while dealing with budget management and forecasting. Many CFOs had to rethink their finance models and strategies. To always be ready for Mission: Finance and act as a sailor for their business’s finance needs through various processes, take a look at what you need to know as a CFO before your LinkedIn connections start noticing that it’s your 5th year anniversary.
The FSN Modern Finance Forum has went on to release a Finance Function Survey that suggests us that the CFO’s role is often “overhyped and full of contradictions.” This research was conducted among 46,000 members of the FSN Modern Finance Forum via Linkedin.
These are the points they gathered through the research:
Times have changed, but this survey applies to CFOs even in 2021 and centuries to come. Every CFO should remember their responsibility to balance financial and strategical roles by collaborating with different teams. They should embrace new age Finance software such as SAP S/4HANA Cloud and stay in sync with the latest innovations. Apart from technical roles, they should also take time understanding what’s in the minds of different team members. All these traits should form the basis of budgeting and other activities.
Every CFO should focus on minimizing cash loss through new strategies such as discounting. The finance model shouldn’t rely too much on a small number of large customers or a single source of income or funds. When they don’t have alternate key suppliers, things turn out to be messy. Hence the CFO should take all these factors into note and set the finance model. Keeping their finance records stable and current would pave way for transparency among businesses. Some of the most effective strategies include Inventory and supplier partnerships and Expense prioritization.
Businesses can also leverage capital expenditure models for evaluating investments to improve the overall sales. This would provide businesses with a competitive edge.
A CFO should always be open to criticism and concerns of every team member. He or she should never function as a one-man army but rather look at various directions from marketing to development. They should also be flexible to changes and adapt easily. When you seek input from different journals, you are sure to attract a lot of prospects. When a CFO is in confusion, it’s always welcome to approach a mentor or a coach who has better experience in this area.
As a leader in a company, the modern CFO needs to propel a culture of security. No longer is our job just about revenue, costs and budgets. There is a strong emphasis on managing risk, driving performance and ensuring the integrity and accuracy of company information.
— Sankar Narayan, former CFO (now COO) of Xero
When a CFO depends upon unreliable data or doesn’t go ahead with change management plans, it is bound to be a risk factor. Hence the CFO should leverage tax plans, nurture healthy business partnerships and keep internal transitions fuss-free with change management plans. When a CFO involves blanket cuts without any realistic targets, fails to sustain behaviorial change and hesitates to invest in new-age technologies, there are huge chances of risk. It is a CFO’s duty to look into it carefully and plan properly.
Today, I think a CFO needs to be more of an operating CFO: someone who’s using the financial data and the data of the company to help drive strategy, the allocation of capital, and the management of risks. – Author: Anthony Noto
A few of the risk prone areas include:
Every CFOs should take these areas into account and handle them with proper strategies.
It’s a CFO’s inherent duty to communicate properly with stakeholders and investors, instead of focusing on stakeholders alone. There is a thin line between mentoring and micromanagement. CFOs should communicate on a regular basis about what they need rather than zooming over every aspect. A CFO should schedule meetings on a weekly basis with board members, C-level executives, banks, investors, employees and private equity investors.
Businesses should reallocate funds to various opportunities such as cost-reducing technology, new investments, innovations and opportunities. They should allocate capital to cater on a 360-degree basis.
Using an all-in-one ERP Software for finance automation such as SAP S/4HANA Cloud, businesses can automate a plethora of tasks including invoicing, finance planning and analysis, bookkeeping, monthly close, tax/trading management, stock administration, employee expenses, billing and subscription.
Do you need more information on SAP S/4HANA Cloud? Our team is here to answer your queries.
To become the best CFO, you need to practice a set of values and ethics, and propel it into your team culture. Also, you should communicate with every department.
Apart from educational qualifications, the CFO should also have technological knowledge to efficiently handle risk management and team communication. The CFO should be in a position to develop the best financial model for the organisation.
There is no shortcut to become a CFO. With a degree and sound knowledge in business and financial management, CFOs are set to top the scoreboard.
Notifications only about new new blog post updates.
Checklist to be considered for a successful S/4 conversion