The role of the CFO has changed considerably in a relatively short period of time; 2021 saw sustainability move up the C-suite agenda, new rules and regulations came into force in the aftermath of Brexit, and pandemic uncertainty caused more disruption for many businesses. It’s unsurprising then that 97% of UK CFOs believe their role has become more complex over the last two years, according to latest research by Tipalti. However, finance leaders were already being asked to juggle a multitude of priorities, which has meant they are now wearing even more hats.
Forced to navigate a new set of challenges, it will be crucial finance teams are ready to innovate, finding new solutions to changing business needs. From becoming more attuned to ESG rating to fighting against the burden of manual processes and tasks, here, Rob Israch, GM Europe at Tipalti explores what finance teams can expect to experience in 2022.
The CFO to work closer with the CEO
As opposed to solely managing financial operations and ensuring compliance, the CFOs relationship with the CEO will intensify in 2022. This shift will see the CFO become increasingly involved in looking at the strategic ways the business can grow and diversify.
Nearly two-fifths (39%) of CFOs have noted a larger demand to collaborate with the c-suite now than two years ago. However, organisations are still slowed down by old ways of working, as nearly a third (29%) of CFOs state they are having to deal with more manual finance operations. As a result, CFOs aren’t afforded time to support the business leader in the way that their job requires.
By innovating financial processes through automation, finance teams can free up time for the strategic tasks that matter most to the business. In fact, UK CEOs believe that the ability to prioritise innovation (25%) and the ability to improve financial and business reporting accuracy and timeliness are the most important qualities for a successful CFO today.
Fighting fraud will become harder
Every year, defending against fraud gets increasingly challenging. As accounts payable complexities rise, finance teams will experience payments fraud at an alarming rate.
Finance teams today are tasked with managing more diverse payment methods, increasing cross-border transactions and dynamic tax compliance and financial reporting. Yet, teams struggle to cope when operations are processed manually. The most common perpetrator of payment fraud is manual processes. They are neither efficient nor airtight enough to ensure optimum financial control. Busy finance teams, escalating complexities in AP and error-prone manual processing sets the perfect scene for fraudsters to take advantage.
To mitigate such risk, companies need to leverage people, processes and technology. This means investing in robust technologies such as automation to standardise procedures. Data entry will be minimised, end-to-end payments processing visibility will be optimised and policy compliance becomes automated. Not only does AP automation relieve workflows by minimising manual intervention, but the technology acts as a hub for enforcing strong financial controls as the number of people and systems involved in payment processing is reduced substantially.
In addition, 2022 will see more multi-entity businesses emerge as organisations recognise the value of the ‘work from anywhere’ model. It can be challenging to manage finance functions across these multiple entities, and that is often why different business units in geographical locations run their finances in isolation, with varying processes and approvals being managed in different ways. However, with no central control or oversight, you run the risk of internal fraud.
Finance leaders to drive sustainability strategies
Following COP26, business leaders are under pressure to set and meet green targets, and many are turning to their CFOs for solutions. In fact, CFOs ranked incorporating environmental, social and governance (ESG) and sustainability into the business and its operations as the greatest driver of complexity in their role (27%), above even the global pandemic (22%).
A key reason for this is that ESG ratings have become an important tool for asset managers and investors to evaluate and compare future investment prospects. Currently more than a quarter (28%) of UK business leaders rank international growth as a top priority for the year ahead, so a less than favourable ESG rating is not an option. So far, the challenge for CFOs has been finding the time to work on sustainable initiatives.
Brexit hangover far from over
It has been over five years since the UK voted for Brexit – but it will most certainly be on the agenda in 2022 as new regulations emerge. There are a number of challenges that Brexit brings, and much uncertainty still remains in place.
In navigating the uncharted waters of Brexit, businesses will encounter new hurdles when looking to fill roles, as the Global Talent Visa makes competition for skilled employees more formidable than ever before. With the visa application deadline passed, some employees may have chosen to move back home contributing to headcount issues for finance teams.
Moreover, the UK is still yet to agree on many key trade agreements. Businesses will need to stay vigilant – watching out for any changes at relatively short notice and be ready to adapt.
Increased attention paid to the well-being of the finance team
Along with many other departments, the Great Resignation period has meant finance is experiencing Churn. Whilst the wellbeing of all employees will be a key focus for the c-suite this year, CFOs will need to ensure the work of the finance team is engaging and talent is not wasted on tedious and time-consuming operations. Introducing automation to take care of those manual tasks will free up time to upskill employees while making them feel valued in their role.
The future office of finance
The year ahead will certainly push finance teams to review the way they operate. The emergence of a wealth of new responsibilities for the CFO, including implementing sustainable initiatives, driving strategy, navigating the uncharted waters of Brexit and managing the wellbeing of their team, as well as fighting against the increasing risk of fraud, will mean finance teams must find methods to work more efficiently. By moving away from fully manual and administrative work and towards new technologies and automation capabilities, CFOs will reserve time for the tasks that matter.