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Finance leaders are taking swift steps to invest and adapt to help their businesses navigate the unpredictable path ahead, according to new insights from some of the UK’s leading CFOs.

The 2017 Global Business and Spending Outlook by American Express and Institutional Investor surveyed 100 senior finance executives in the UK, more than half of whom work for companies with more than $1 billion in annual revenue. It gives an important glimpse into the thoughts and strategies of the UK’s most influential CFOs as the asks, and influence, of the CFO has never been greater.

There is understandable caution in the market, given geopolitical events unfolding around the world. However, rather than tightening the purse strings, almost all the finance chiefs surveyed (99%) say their company’s spending and investment will increase worldwide during the next year.

And CFOs are playing a central strategic role when it comes to mitigating the impact of ever-changing market conditions, indicating the evolution of the CFO into the Chief Flexibility Officer, with more responsibility but also more influence across the business than ever before. In fact, more than eight in ten (81%) say that the most senior financial officer wields more influence over strategic decision making than the CEO in their business.

Boosting competitive advantage seems to be the main strategy for CFOs tackling the uncertain economic climate. Ensuring the organisation remains competitive is cited as the biggest business priority (67%) and 92% of CFOs are increasing spending to ensure this happens.

To strengthen this competitive advantage, companies plan to spend more on customer service (67%), technology infrastructure (51%) and labour/headcount (48%). This is supported by reports of increased pressure to compete on the quality of customer service (84%), a focus on information security and how difficulties in hiring and retaining employees (sales and marketing staff in particular) are preventing businesses from hitting their goals.

But finance execs are also investing in financial reporting and compliance (37%), production inputs (35%) and advertising, marketing and PR (31%) as transparency remains critical, prices rise and the battle for market share continues to wage. And 59% say exports are set to become more important for growth.

Jose Carvalho, Senior Vice President, Global Commercial Payments Europe at American Express says: “CFOs in 2017 don’t just have to balance the books – they are having to tackle everything from automation to international trade, and plan their investment accordingly. The Chief Flexibility Officer isn’t just the guardian of the purse strings. They are absolutely critical to helping businesses survive and thrive, by investing in the right areas, in the right ways.”

“We work with business leaders across the country to make sure they are set up for success today and in the future. As a result we know how important it is for finance teams to have tools at their disposal to help them operate and grow their business efficiently – and for them to deliver the strategic value we know will be so important for the rest of 2017 and beyond.”

(Source: American Express)

The CFO Agenda will return to London on 1st June. Ahead of this year’s event the team reached out to 150+ CFO’s and FD’s from across Europe to understand the key opportunities for their businesses across the next year.

The CFO team have polled leading CFOs and finance leaders from across the UK and Europe on their priorities, concerns and plans for the future. The responses gathered reveal insights on the changing nature of the finance profession and the CFO role, immediate and long-term risks facing the business, the level of financial uncertainty affecting the business and the biggest opportunities over the coming years.

It is clear from the survey that CFOs are heavily impacted by the macro-environment and face an uncertain future trading in a volatile environment. Digitalisation is becoming increasingly more integrated within the finance function and is slowly being accepted as an opportunity for smart, evidence-based decision-making, but we still have a way to go to convince finance of the ROI on expensive new technologies. The changing nature of the CFO role is an opportunity for driven finance professionals to lead change and transformation within their organisation and prepare robust strategy and finance models for the future. The skills shortage across roles and industries is widening the talent gap and finance has a responsibility to create innovative strategy to prepare for the future of work and a new generation of workers. Change affects us all and with change comes exciting new opportunities for the future. It is not all doom and gloom; growth and internationalisation is still high on the agenda for CFOs and we hope to see a steady rise in the economy as we learn to accept our situation and grow in new markets and geographies.

Opportunities for business in 2017

 

 

Launching into New Geographies

With all the uncertainty and doubt surrounding the UK economy, launching in overseas markets can add valuable extra sales (and profits) which in turn can help generate economies of scale on the existing cost base. This appears easier than it is, but customers are always on the lookout for something different and so a clear and unique proposition that is well marketed can help you stand out from the competition.

Staff Engagement

It’s no surprise that successful companies tend to have highly engaged teams that seem to be able to achieve things other businesses can only dream of. Furthermore, the most engaged teams tend to be aligned with one another making it far easier to continually achieve business goals and objectives which can be an enormous contributor to productivity throughout a business. In this time of competing priorities and deadlines, it’s never as easy as it seems to get everyone engaged so it’s a case of regularly trying new ideas and methods.

Technology and Innovation

Nowadays IT is a fundamental part of almost every business and most businesses have a long list of improvements they would like to make to their IT infrastructure, each of which could improve some part of the business. The challenge for CFOs is to work out which of these improvements is really going to deliver sizeable benefits and give them a competitive edge. Once identified, it’s then a matter of getting it in on time and on budget.

(Paul O’Leary, CFO, Boden)

 

Technology and Innovation will be a core focus at this year’s CFO Agenda 2017, as we welcome Steve Dixon, VP Future Finance, Unilever to discuss how finance can embrace the digital world and unlock value across the business.

Steve’s session will explore the importance of setting a clearly defined and unified digital strategy and will identify best practice on how technology can strengthen the role of finance and the impact the CFO can have on the organisation.

 

For more information on the programme, please visit www.TheCFOAgenda.com/programme-2017.

To find out more about the event, please visit www.TheCFOAgenda.com.

This week Finance Monthly benefits from an exclusive analysis by Eric Werab, Global Product Line Owner, Financial Control Solutions, Fiserv. Eric details his thoughts on the value of streamlining reconciliation, the overall benefits and the best ways to go about it.

In today’s increasingly digital world, financial departments are receiving more and more data on a daily basis that needs to be managed and processed effectively and efficiently. Many institutions still take a disjointed, departmental approach to reconciliation that constitutes multiple systems and manual interventions. When financial controls fail or are absent, the damage to reputation and bottom line is undeniable. CFOs need to have access to a single view of any balance sheet at any time, which need to be accurate and up-to-date. However, with multiple systems and various teams managing different aspects of the reconciliation process, providing the most current information is extremely difficult, if not impossible.

Automating and streamlining the reconciliation process so that it is enterprise-wide can save on valuable man-hours and increase the likelihood that exceptions are identified and rectified quickly.  This strategy also ensures that organisations have the ability to stay ahead of the competition and remain compliant with industry standards, as well as deliver a high level of service to customers.

Digitisation and Cost-Effectiveness

Traditional reconciliation processes are spread out across teams resulting in errors being missed, and making it virtually impossible to compile a full picture of accounts. By automating the process, data is displayed in one single place and anomalies are more easily identified, and costs are reduced. Digitising the reconciliation process can help alleviate some of these costs as errors, late closings or being out of compliance with corporate policies can be avoided with an automated system, again saving on billable hours that can be reallocated to add value elsewhere.

It is not just financially that automating the reconciliation process can benefit an organisation. Key aspects of back-office processes can be simplified and secured with the use of technology. A large benefit to streamlining the reconciliation process is that the full range of financial instruments is supported by automation, ensuring that discrepancies and exceptions are more easily spotted and secured. Additional securities, inter-company transactions and trades are also built into this system and ensure that only one platform is necessary. This single-screen approach ensures that executives are able to see and identify exactly what is happening, in what area of the business and when it occurs; all helping mitigate balance sheet attestation and account certification risks.

Value of Streamlining Reconciliation

The first step in implementing an automated reconciliation process is realises the true projected expense of a manual system. Bringing together transaction-level and balance-level data in a single system is a key benefit to introducing a comprehensive reconciliation solution, as it provides detailed information on why exceptions have occurred and how they can be resolved quickly and easily. Using technology to identify these errors, rather than manually searching for them, improves effectiveness within organisations and lowers operational costs.

Workflows are used to fully automate the process and a series of automated checks ensure organisations remain compliant with corporate and industry controls. By automating the end-to-end reconciliation process, companies can track exceptions through to resolution quickly and cost-effectively.

Intangible Benefits

In addition to these measurable savings, there are advantages that can be harder to determine but that provide significant value to an organisation that has opted for an automated system. Increasing visibility and transparency by utilising automated reconciliation processes impacts the confidence that executives have in the accuracy of financial reporting.

Increased clarity also helps an organisation significantly lower compliance and reputational risks. With an automated reconciliation system CFOs and accounting teams can be sure that all of their accounting information is accurate, thereby improving the visibility of business performance, but also reducing the risk of error during monthly and quarterly financial close periods. Businesses will also gain peace of mind that their financial control has improved, while also allowing their teams to adopt the best practice across financial processes with ease. Finally, teams can focus on more profitable activities, as less time will be spent on closings, exception management, routine compliance and financial governance activities.

Choosing the Right Platform

Individual systems contribute to the overall reconciliation process, therefore choosing a technology to combine all, including the general ledger system and the trading system, is vital. The need to provide a single version of the truth for senior management is one of the most significant points in the business case for streamlining the reconciliation process.

Another factor to consider when integrating an automated reconciliation system is the ongoing reconciliation management, as this will need updating from the management of manual processes. Reconciliation specialists from across the business should establish a set of rules that remain consistent; the rules should be laid out and defined using comprehensive process templates so that there is clarity and transparency across the whole business.

The scope and scalability of a reconciliation system are   important factors in selection. Being flexible to meet any change in transaction size is essential when incorporating an automated reconciliation system. The technology that shared services depend upon should not be a barrier to business growth. Being able to easily integrate new acquisitions or business lines into the system to support growth objectives with ease is imperative to the success of a streamlined reconciliation system.

By centralising the reconciliation process through a single service model so balance sheets are more accessible, accurate and compliant provides organisations with a major increase in operational efficiency. The cost benefits of a streamlined system allow value to be added elsewhere, while simultaneously reducing compliance risk. In addition, it allows a company to provide a better experience to customers who expect an effective, real-time service whenever they demand it.

Before financial institutions embark on implementing a shared services strategy for streamlining reconciliation, it is important that they define exactly what they would like to achieve in the future. By building bridges with all departments and keeping the lines of communication open, it’s possible to identify areas for improvement and collectively agree changes that add value to the organisation in the future.

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