Office of the CFO: New roles and responsibilities
Technology and regulatory necessity have driven Chief Financial Officers to take on more responsibility in their companies. As a result, every CFO needs to excel in three main areas that may not have fallen under traditional CFO roles and responsibilities: understanding the operations of their business, driving innovation both technological and procedural, and reporting financial results to various stakeholders.
For a company to thrive in today’s climate, the CFO should be acting not just as the person in charge of the company’s financial plans. The successful CFOs of the day are keepers of data and educators. A CFO needs an intimate knowledge of the business to then educate internal and external stakeholders and investors about the company’s financial results, show how those results can be bolstered by technology, and identify strategies that can be deployed across different departments to support compliance and, furthermore, financial success.
Understand how the business grows
In order to lead a successful finance department in today’s ever-changing market, a Chief Financial Officer needs to cultivate a deep understanding of his or her business. Fulfilling the CFO roles and responsibilities such as closing the books on time, leading the charge to ensure regulatory compliance, and keeping track of the company’s finances, will be more effective and impactful through an understanding of how the business scales. What drives growth? How must a company operate within the market to succeed? These questions should be top-of-mind for CFOs.
As new financial regulations have been introduced over the past decade, CFOs have been pushed closer to the numbers of their business. Tasked with making sure their organizations are compliant, CFOs need a deeper understanding of the business drivers and key indicators – and not just financial or transactional. While understanding ROI is crucial, CFOs need to be able to evaluate their company’s portfolio performance in order to identify areas of concern and opportunity and play a role in setting the strategic direction of the organization with other senior leaders and investors.
Drive innovation and emerging technologies
As we progress further and further into the digital age, organizations are feeling the pressure from investors to adopt new technology to cut down the cost of doing business and meet regulatory goals. Given their position, CFOs have the top-level view of the business’s finances which, matched with an understanding of emerging technologies, can help meet investor needs. Cloud-based solutions, strategic partnerships, and system roadmaps are just a few of the technologies that can be leveraged to improve performance and efficiency, and CFOs should be constantly assessing new solutions that could benefit their business.
Implementing new software solutions, however, is not the only effective way to shake up daily processes. The Chief Financial Officer is also in the perfect position to take the reins in driving innovation as it relates to discovering new technology solutions and practices to improve operational efficiency and break information silos between departments. As overseer and analyzer of the company’s financial data, CFOs have all the information at their fingertips to identify areas that could benefit from a reorganized process. Introducing new, data-based ideas can also help cut operational costs and optimize workflow.
Communicate financial results
Chief Financial Officers have a responsibility to stakeholders (both internal and external) to report financial results and other important metrics. CFOs are no longer able to simply bring profit/loss reports and balance sheets to external stakeholders – investors want to know the explicit details as to where the business stands in each market. In addition to this, CFOs of real estate organizations are also in a unique position to report the ROI of specific properties to individual investors. This way, CFOs can give investors insight into the exact value and performance of individual properties and portfolios.
CFOs should also be reporting financial results to internal stakeholders and training teams such as marketing and operations on the ways to leverage this data. Delivering information regarding sales history, trends, and pricing models to marketing can lead them to improve their strategic planning by analyzing the bigger picture. Presenting cost analyses, productivity models, and capital expenditures to the operations team also gives them the opportunity to adjust their practices and plan out new strategies.
In today’s rapidly-changing business climate, too many companies fall behind the curve of change and struggle to get back on their feet. Whether the challenge looks like operational inefficiency, seemingly-cumbersome regulations, or even unforeseen financial obstacles, CFOs have the ability to take leadership in new ways to help their companies stay ahead of the curve, and more so, to prepare for whatever challenges may face their business. Learn more about the new roles of the Chief Financial Officer and how they affect the way companies do business.
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