The Role of the Modern Day CFO

The introduction of new technology has led to substantial changes to the roles and activities of those working in the financial sector.

Automation technologies, in particular, are overhauling the way people work by taking over more routine administrative tasks and therefore reducing the amount of back office work needing to be done by individuals.

This is leading to an evolution of the role of the modern-day finance professional – primarily that of the CFO – and here Marieke Saeij, CEO at Onguard, presents finance Monthly with some of the key changes we should expect to see.

The need to develop new skills

As automation technology becomes more prominent in the financial sector, CFOs will be able to dedicate more time to bigger picture issues, such as where they can create business efficiencies, and focus on how else to add value to their organisation. As a result, they will be required to develop new skills, such as analytics, communications and programming. This will ensure they have the knowledge and ability to interpret and analyse data collated within their credit management system, for example, and turn these insights into actions. CFOs should also look to create new KPIs to ensure they are continuing to get the most of their operations and focus more on managing financial processes, rather than carrying them out.

As CFOs spend less time on the monotonous day-to-day tasks, they will also be able to look more closely at customisation and ensure they understand and deliver each customer’s preferred communication channels and payment methods for their invoices. This will allow the business to interact with customers in the way they prefer to increase the chances of invoices being paid on time and to strengthen existing relationships.

Developing new strategies

The use of big data in predictive analytics is providing CFOs with key insights on a wide range of issues, which can be used to drive better commercial decisions and inform decision-making processes. This will enable them to add strategic value by being proactive, rather than reactive, as they can use information from the past to predict the future. For instance, predictive analysis may show that a certain customer has paid his invoices on average within 28 days for the past seven years. This means it is highly likely he will also do the same when he receives the next invoice. CFOs can then use this information to decide how they interact with this customer, chasing for payment only after that time period has elapsed.

The introduction of real-time finance cycles could also change the way CFOs operate as they will no longer be using outdated figures and basing important decisions on potentially inaccurate information. With real-time finance cycles, CFOs will be able to work with the most up-to-date information and be reassured that they are making business decisions with the latest available data. This will allow them to see where possible adjustments need to be made and take action immediately.

Cross-department collaboration

Often, the siloed nature of large companies inhibits the efficiency of a CFO as it means they have a lack of visibility and are not always privy to important information. With more time available to them, CFOs could collaborate with other departments within the company to ensure the organisation gets the most from all of its financial operations. This will help every department to have a better understanding of what other departments are working on, how this may impact them and the financial processes involved. This will stimulate greater openness and understanding between teams and could improve the business’ credit management processes.

The modern-day CFO will be substantially different from the traditional view of the role. However, this is a fundamentally positive thing. Thanks to increased use of more advanced technology, CFOs will be able to move away from the more mundane day-to-day financial tasks needed to keep a business ticking over and take on a more strategic, diverse and value-adding role.

Leave A Reply

Your email address will not be published.