CFOs wrestle in real-time with many competing priorities, yet they’re often primarily responsible for the decisions that determine the long-term success of their companies. Withum Partners, Chris Passmore, Kevin Holmes and Aza Ghazaryan look at five key markers that help CFOs anticipate the needs of their businesses to position them for future success.
The Role of a CFO
“CFOs are the catalysts at the point where strategy, decision-making and implementation merge,” said Passmore. “What we see in successful CFOs is the impact of their actions on all business operations, including those outside their immediate financial obligations such as marketing, talent management and customer service. We recommend that CFOs focus on the following areas to help future-proof their business.”
Talent and Culture Management
The pressure to hire and retain talent revolves around investing in people and their technology and tools. Businesses should plan for compensation above the norm and initiatives to foster team building and a balanced work-life integration. CFOs must defend the spending necessary to develop and sustain an attractive culture, build and keep a talent pipeline, train better than competitors, invest in career development, and implement an integrated technology stack.
Effective Cyber and Data Security
The threat of cyber hacks and data breaches is a ghostly line item on a CFOs balance sheet. The costs stemming from downtime, reputational damage, remediation, and enforcement, mean CFOs now play critical roles in developing business continuity policies and incident response strategies. Threat assessments, mitigation strategies, systems hardening, and the technologies that enable these services, are expensive ever-growing costs that require accurate forecasting in a highly-connected business environment. Therefore, cybersecurity is a business imperative.
Intelligent Process Automation Improvements
Intelligent Process Automation (IPA) is Business Process Automation (BPA) with an artificial intelligence (AI) component. It combines advanced tools and Robotic Process Automation (RPA) into one business capability, which CFOs can implement to streamline their daily tasks.
Holmes explained, “We see CFOs automating complex processes, like expense accounting, throughout enterprises. The benefits of IPA include fewer errors, reduced time, integrated apps and consolidated in-house and cloud-based data. The uptake of these new processes can be uneven, so the CFO must stand behind the investment in AI-enabled BPA and stay the course.”
Bottom Line Impact of Enterprise Sustainability
Environmental, social and corporate governance (ESG) is a trending priority for businesses as the adoption of worldwide ESG standards gains traction. There is strong evidence that effective ESG strategies reduce employee turnover while improving public perception of the company and stock prices, creating positive impacts on companies’ bottom lines. Numerous stakeholders, including shareholders, vendors, investors, bankers, customers and community members, seek meaningful and transparent sustainability and impact reports from companies.
Transaction Readiness
When it comes to mergers and acquisitions, it is impossible to overstate the importance of the CFO’s role.
Ghazaryan remarked, “The process of positioning a business for a sale or acquisition starts with pre-bid advisory and preliminary due diligence and moves on through the stages of synergy and cost analysis, and quantifying valuations. Deal terms, financing, execution, succession, and post-merger integration all follow, and all are in the CFO orbit. For start-ups and IPOs, additional financial reporting demands include forecasts, financial statements and audits. When exploring M&A opportunities, CFOs must work with their accountants to ensure transaction readiness, anticipating the perfect deal.”
What’s at Stake
CFOs play a pivotal role in their company’s future and should integrate talent management, cybersecurity, automation, ESG and transaction readiness goals into their purview. This shift in focus on financial responsibilities will help future-proof the business by reducing long-term costs and employee turnover, preventing reputational damage, and keeping the company ahead of the competition regarding product development and customer service.
Withum is a nationally-recognized, forward-thinking, technology-driven advisory and accounting firm. Our professionals are Trusted Advisors, offering smart business solutions to help companies grow, innovate and stay secure in today’s complex business environment.
Learn more at withum.com/more-than-cpas/ or contact (818) 789-1179.
