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The Role of the Modern Day CFO

By Bert van der Zwan, CEO, Onguard

In recent years, as technology has evolved, so too have the roles and responsibilities of individuals working within the finance sector. Nowadays, automation technology is being used in financial processes within businesses and is giving finance professionals real-time access to data from which they can gain valuable insights. Consequently, the role of the finance professional and the CFO, in particular, is changing.

Bert van der Zwan

However, these developments have caused some concern about job security with research conducted on behalf of Onguard finding that over a quarter of CFOs believe their job won’t exist in its current form in ten years’ time. Fortunately, this is unlikely to be the case, and instead, we will see a continued evolution of the role. As CFOs will no longer need to spend prolonged periods of time on manual activities, such as chasing up late payments, they can begin to focus more closely on the bigger picture issues, as well as those accounts that are in greater need of their attention. CFOs will, therefore, be driven towards more strategic, value-adding roles. So, what will the role of the modern-day CFO look like?

The importance of gaining new skills

Across the business world, automation technology is now being adopted for routine administrative tasks which is reducing the amount of back-office work done by people. This is shifting humans towards more challenging roles, which requires them to develop new skills. With this in mind, it will be essential for CFOs to harness their analytical, communication and programming skills. Analytical skills will be especially useful as it will allow CFOs to interpret data collated within their credit management system and turn it into actionable insights. 

As part of these value-adding roles, CFOs can 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. With less time spent performing the monotonous day-to-day tasks, CFOs will be able to look more closely at customisation and ensuring they understand and deliver each customer’s preferred communication channels and payment methods for their invoices, for example. 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 the existing relationships.

“it will be essential for CFOs to harness their analytical, communication and programming skills.”

Deriving insights from big data 

The modern-day CFO will also be responsible for using big data to derive key insights which can be used to drive better commercial decisions and determine new strategies to cut costs. This can allow CFOs to make a substantial impact on the example, as shown by UPS using data to determine that it could significantly reduce costs if drivers took fewer left turns. This finding led the courier to save 38 million litres of fuel and the significant price tag attached to that. 

Further to this, CFOs could use big data for predictive analyses which would enable them to make connections which inform decision-making processes. This would help finance professionals to add strategic value by being proactive, rather than reactive, as they can use information from the past to predict the future. For example, predictive analysis may show that a certain customer has paid his invoices on average within 28 days for the past seven years, which means it is highly likely he will do the same when he receives the next invoice. The CFO can then use this information to decide how the finance team interacts with this customer, chasing for payment only after that time period has elapsed. 

“CFOs could use big data for predictive analyses which would enable them to make connections which inform decision-making processes.”

Encouraging company-wide collaboration 

The siloed nature of large companies often inhibits the efficiency of a CFO as it can mean they have a lack of visibility and aren’t always privy to important information. Additionally, if each department works in isolation, it means that the finance department won’t be as effective. CFOs can, therefore, help organisations to address the disconnect between sales and finance, for example, by encouraging the sharing of information between teams and helping each team to understand what the other does. After all, a sale isn’t a sale until payment has been made, so collaboration is needed to ensure that the sale really comes to fruition. As part of this responsibility, CFOs could spend more time collaborating with other departments within the company to ensure the organisation gets the most from all of its financial operations. 

An opportunity for CFOs 

The role of the CFO has certainly undergone significant changes in recent years, and this is only going to continue as technology develops at pace. Yet, this shouldn’t be a cause for concern. Instead, it’s vital the modern-day CFO makes the most of the technology available to them to automate some of the more monotonous financial processes and use it as an opportunity to develop new skill sets and add value to their organisation in new ways. 

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