CFOs in the Digital Era: Overcoming Challenges

As per the 2023 stats, 78% of CFOs actively participate in IT technologies to enhance financial performance, and 22% of CFOs believe that their company struggles to accept new technology solutions, whereas 50% of CFOs want to adopt a financial ERP for real-time insights and overall growth. 

We can see that CFOs want to align with the latest technologies, whether it is cloud or automation, but they are struggling to find the appropriate way of doing this. We all know that businesses are adopting the latest technologies to digitise the entire business in the hope of automation, simplicity, and profitability. This digitization is undoubtedly pushing businesses towards enhanced growth, but CFOs must overcome a new set of challenges to grow further. 

Do CFOs really face challenges with so many technologies around them? Yes, despite technology, there are other challenges they have to overcome to keep financial activity seamless.

Source (http://cfo.com/) 

Gone are the days when a financial executive managed everything manually on pen and paper. Professionals used to manage everything on Excel spreadsheets, making the entire process complex and cumbersome. But times have changed a lot. We have a lot of business solutions from technology giants like Microsoft or Google that can not only streamline the financial operations but the entire business as well. 

Still, CFOs are facing a lot of challenges while adhering to the latest technologies. Before getting into the top pain points CFOs are facing, let’s discuss who the CFO is and its role in a business. 

Who is CFO? 

A CFO (chief financial officer) is a C-level executive who manages, controls, and tracks the entire financial operations of a business. These tasks include cash flow, financial planning, taxation, accounting, and much more.

Also, the CFO is responsible for streamlining the income, expenses, resources, funding, and profit of an organisation. Even the CFO is the one who distributes funds for different campaigns of an organisation and keeps track of each penny.

The job role of CFO is not only limited to managing financial operations but also includes participation in core decision-making of a company, like a strategic and planning partner.

Top Challenges for CFO in 2023 and Beyond

Based on our industry research, we have identified a few challenges that most CFOs of modern businesses have to face. These challenges can be due to changing world economic conditions or increasing inflation around the globe. Once financial officers understand these challenges, they can take a business to the next level. 

Cost Optimising

Optimising costs is one of the biggest challenges most CFOs are facing. As per the Grant Thornton CFO survey, 58% of CFOs are more concerned about optimising costs in different areas of business. AI and BI play a vital role in enhancing the profitability of core operations while reducing and optimising the overall cost. 

Finance Forecasting

CFOs have to predict the upcoming financial requirements on the basis of current scenarios for a business in terms of finance and accounting. Without proper technology or traditional methods, this process can become burdensome. In such a scenario, predictive planning, data analytics, and machine learning would become useful to speed up the entire process. 

Finding and Retaining the Right Talent

Finding and retaining the right talent is considered one of the biggest challenges for all CFOs. Because this process requires a lot of resources and investment. CFOs are working hard to fulfil the labour shortage so that a business can perform at full scale.

Cash Planning

We have just gone through a pandemic where we learned the importance of proper cash planning. You know it well: with poor cash management, various businesses have shut down their operations. A good business application can help you analyse the cash and give you an accurate report, whether monthly or annually. It helps the business sustain its processes in any scenario or calamity.

Finding Right Investment Opportunities

CFOs have to optimise the processes and look for profitable opportunities while considering the risk involved. You will find EPM solutions, also known as enterprise performance management solutions, that track the performance of a business while assisting the CFO in finding the right opportunity. 

Calculating Profitability

With the right financial sheets and accounting information on accounts payable and receivable, the CFO can calculate the profitability of a business. With the right ERP solution, CFOs can even calculate the profitability of a single process. If any of the processes are not performing well, they can make changes considering real-time insights for maximised performance.

Accepting Technologies

A CFO is always in search of new technologies that can streamline the business and simplify operations. It supercharges the productivity of all employees while pushing them for enhanced efficiency. In short, they push businesses towards digital transformation while reducing the total cost of ownership.

Financial Planning

To run a successful business, financial planning is a must. This includes tracking the cash flow, managing the existing resources, optimising the funds, and much more. This is a potential aspect for all CFOs because it is a core function they must adhere to.

Risk Management

Risk management is one of the critical concerns and goals of CFOs. We all understand the sensitivity of data and the importance of the information it contains. Here, CFOs have to manage the risk of cyberattacks, malware attacks, data loss, preventing fraud, and more such scenarios. 

Accepting Compliance

CFOs must prioritise accepting global regulatory compliance so that they can perform business in different parts of the world. They must adhere to managing the ESG (environment, social, and governance) reporting along with achieving the sustainability goals with minimum efforts. 

How can a perfect ERP solution help Overcome the CFO's Challenges? 

A 360-degree holistic view of a business can resolve most of the above-listed challenges. And, when it comes to offering top-to-bottom visibility for all business operations, a perfect ERP (enterprise resource planning) solution would be the right fit for you. Once you implement an ERP solution in your business, you will avail yourself of the below-listed benefits:

Full Transparency

ERP offers full visibility of all business operations, whether simple or complex. This lets the CFO remain updated about each process a particular department is going through. This visibility helps top-level executives make big decisions with ease.

Centralised Database

ERP offers a centralised database so that the data can be accessed, stored, and shared on the same platform. It even lets the financial department fetch the data related to all financial activities without any approval.

Access Automation

Automation enhances efficiency while eliminating manual and recurring processes from the system. Such processes include journal entries, accounts statements, receivables, payables, and tasks like data entry. This lets the CFO manage the entire financial operation from a single dashboard. 

58% of CFOs plan to increase their investment in automation over the next 12 months ( Vic.ai , 2022)

Source: https://www.vic.ai/resources/cfo-report-the-future-of-automation-and-intelligence-within-enterprise-finance 

Manage Multiple Entities

In the era of globalisation, we can expect businesses to run from different geographic locations. Even the management of multi-currency, multi-language, and multi-location support isn’t an easy task to perform. But a perfect ERP can do it without making errors, thanks to automation.

We have reached a point in business where, intentionally or unintentionally, we have to depend on technological advancement. Also, we have to continuously implement such technologies to stay ahead of market competition while remaining profitable. 

Source: https://www.cfo.com/ 

CFOs understood this well and are working to adopt latest technologies in minimum efforts as well as resources. It is even the only way CFOs have to go through to overcome the challenges they are facing in 2023 and beyond.

In terms of advanced technological ERP solutions, especially for CFOs, Microsoft Dynamics 365 Finance would be a perfect solution. It is so advanced, powerful, and simple that it can streamline entire financial operations of a complex business without any hassle. You won’t’ believe it? Just give Dynamics Square a contact and let us show you a free demo.