CFOs often have a variety of responsibilities, which can be on a long list. Although their main role is to protect the value of the company, they can also play an important role in optimizing and increasing its value. However, it has been established that, especially through financial reporting, one of these possible roles should be assumed by CFOs: value protection.
But in the new normal, CFOs should stop thinking only in a linear way such as "where we are now" and "where we are trying to get." Instead, they should probe the future and look beyond the "now" and what "follows immediately after." There are three areas that CFOs need to focus on:
1. Building trust in technology
Building trust in Artificial Intelligence (AI) is difficult in an environment where corporate governance, controls, professional standards requirements, and regulations are still struggling to keep up with the pace of technology change. However, the reservations could rather be a reflection of the lack of understanding about how these new software platforms work.
An alternative perspective is that Artificial Intelligence and Machine Learning can increase the credibility and accuracy of the information, rather than diminish it. It is safer to conclude the analysis of large data sets made with software tools than to rely on a person who probes a single data set and can introduce his errors of judgment into the equation.
2. Transforming the operating model and financial reporting
Due to technology, a major change is expected towards a smarter and more open operating and financial reporting model. More than half of the financial and reporting tasks currently performed by humans are estimated to be performed by robots in the next three years. From this point of view there are two priorities:
• Choosing a partner or defining an externally managed service strategy to achieve digital transformation goals: many recurring processes, regulatory and compliance reporting activities may not be managed internally but taken over by professionals in the field and accredited providers of such services.
• Moving the financial function and reporting to the cloud: It is now clear to companies that this cloud is more than a storage space for large volumes of data, but it is also a space for inter-networking of technologies. For example, AI involves huge processing capabilities, and the cloud is the infrastructure that makes it possible. In turn, AI plays an important role in advanced analysis, allowing the finance department to obtain information by simulating aspects of human intelligence and analyzing large amounts of data.
3. Rethinking leadership roles and financial skills
No less than 5 years ago, the requirements for the success of a CFO were different from those that are relevant now. Building strong relationships with leaders of other departments of the company goes through important transformations that mark, for example, less collaboration with the director of human resources. However, building a good relationship with the leaders of the other departments opens the way for a good collaboration and acceptance of the change.
CFOs need to retrain their people to equip them with the skills they will probably need in their future financial position. Important actions could include conducting an assessment to identify existing staff skills gaps and developing new incentives to encourage staff in the finance department to learn new skills. But in addition to a learning experience, finance department leaders need to develop a culture of lifelong learning.
Instead of conclusion
The COVID-19 pandemic is a significant challenge for CFOs and finance department teams. Their leaders need to look ahead and think about the long-term future from the perspective of the changes that digitalization brings. Leaders with a vision in the financial field are attentive to these transformations and look beyond their traditional role because they want to provide the value that stakeholders expect.
Recommendations for CFOs:
• Adopt relevant technologies to be valuable providers
• Contact an accredited provider of high-performance software solutions
• Re-train people to use these technologies
• Build trust with company department leaders
• Build a culture of lifelong learning
About PKF Finconta
For more than 26 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR, and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping, and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.