The CFO Playbook 2022: Three New Challenges

Challenges and opportunities for today's CFOs

It’s challenging times for today’s CFOs. No longer just the bean-counter in the corner, finance leaders have growing remits and are now at the heart of cross-functional decision-making like never before. As a recent McKinsey report showed, a greater share of CFOs now have more multi-functional responsibility.

Greater responsibility and accountability – plus the rigours of post-pandemic pressures, rising inflation, geopolitical conflicts and volatile markets - means CFOs must develop an enhanced understanding of business functions outside their immediate scope. The need to enhance productivity and reduce costs is intensifying. Digital transformation and greater complexity require new methods to process and analyze data, leading to sharper insights for better problem-solving.

Here we look at what’s keeping CFOs up at night, and suggest how they can better tackle the challenges facing them today.

Global change

Uncertainty is the new normal. The effects of the pandemic are still being felt in worldwide markets, there are post-Brexit issues, plus rising inflation and geopolitical conflicts. These factors are disrupting everything, including supply chains, recruitment and retention, investment and growth.

CFOs are contending with...

• Rising inflation
• Rising interest rates
• A seller’s labor market raising the bar on pay and conditions
• Higher material and transportation costs
• Supply chain delays
• The race for digital investment
• The rise in cybercrime
• Greater volume and complexity of transactions

... while striving to remain competitive and deliver to budget.

Focusing on the pain points

Let’s take a closer look at three key drivers influencing the challenges confronting today’s CFO.

Rising costs

Costs are growing throughout the value chain, as the price of materials and components increase and availability decreases, compounded by persistent supply chain disruption. Fewer than 10% of CFOs expected supply chain difficulties to be resolved by the end of last year, with most respondents to a Duke University CFO survey anticipating the issues would be resolved only in the second half of 2022 or later.

‍People

Labor is largely in the driving seat with unemployment low and demand for talent high. Some CFOs are having to adapt fast to retain top talent, for example software company OpenText CFO Madhu Ranganathan said the company did two rounds of salary reviews in 12 months for the first time due to inflation.

But pay is only one factor in the war for talent. Employees are less willing to take on roles that offer low flexibility and a high level of mundane, repetitive tasks. CFOs need to find ways to remove time-consuming, fiddly and unsatisfying processes from their team’s workload, so their colleagues can work on more challenging and rewarding value-add activities. Automation and data processing tools can help by removing repetitive tasks, but also by delivering advanced reporting that frees colleagues to spot patterns and deliver positive change.

‍Digital transformation

The world of finance is becoming ever more complicated. Globalization, new transaction methods such as eCommerce and contactless, new payment models including Buy Now Pay Later, and the rise of cryptocurrencies have driven both the complexity and volume of information that finance teams need to deal with.

The only way companies can keep pace with this exponential growth is by investing in new digital technologies including AI, machine learning and automation. CFOs need to choose, then adopt and embrace new data-processing powers that will cut workload while increasing insights. They need to do this fast – the growth of digital-first competitors means any delay will impact their organization’s ability to compete.

The new, data-driven model

A recent Harvard Business Review Analytic Services report found many finance teams struggled with accurately preparing, reconciling, integrating real time information, analyzing and forming recommendations from their data.

The answer is advanced data-processing abilities that give CFOs greater control, more agility, more focused insights and a happier, more productive workforce. CFOs recognise the need for investment; Deloitte’s UK CFO survey revealed a record number of finance leaders were prioritising investment in 2022. An ‘overwhelming majority’ were expecting greater investment in digital technology (94%) and workforce skills (77%) over the next three years.

The right tools and software, for example for reconciliation and automation, allows for a wealth of valuable, verified ‘single view’ insights. This places CFOs in the position of key data driver, capable of pushing the organisation forward and confidently making key business decisions quickly, particularly in times of uncertainty. It also allows for cradle-to-grave views of an organization’s data, delivering greater transparency for regulatory and compliance demands.

Investing in tailored, secure and up-to-date technology also sends out a positive message to current and prospective employees. Automating low-judgement tasks such as transaction matching allows employees to focus on adding real value to the organisation. This is especially beneficial if companies are looking to scale without increasing staff given the current labor market.

Summary

‍Leadership teams are counting on CFOs to deliver more. The way to do this is by eliminating low-value, time-consuming tasks, data inaccuracies and workflow inconsistencies. Reconciliation software can reduce operational costs through automation, enhancing visibility and access to data, increasing accuracy and speed of workflow, and improving data evaluation and analysis to help produce actionable insights.

Automated reconciliation with Aurum

We are financial data matching software specialists. For more than 14 years Aurum has been helping CFOs for some of the world’s most recognizable brands achieve their reconciliation goals.

We help put businesses in the driving seat with their data, ensuring compliance and control with a quality product tailored for each client’s needs. We work across industries and have a diverse client list including Center Parcs, Ladbrokes, Fullers, and Versapay. Our partnership approach ensures we’re always on hand on your reconciliation journey.

Let us show you how our technology can help today’s CFO meet their challenges via automated reconciliation. Book a demo with us now.