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How CFOs Cope with Expanding Roles

by FEI Daily Staff

A recent survey shows that CFOs continue to gain more responsibilities outside of traditional accounting and finance as they become responsible for more business activities than ever.

Key areas of expansion are:

  • Human Resources (21%)
  • Information Technology (19%)
  • Operations (18%)
  • Marketing (17%)
  • Sales or Business Development (10%)
Analysts cite numerous contributing factors to this trend, including increased compliance, tax and regulatory pressures. EY (formerly Ernst & Young) recently noted that more management, measurement and reporting for corporate sustainability activities also add to the work of CFOs. All of these factors are compounded by the growing need for CFOs to serve more frequently as strategic advisors to leaders across organizations.

With more and more work to do, the office of the CFO is under constant pressure to convert more raw data into valuable information for fast, accurate insight throughout the business. So, how can these highly stressed finance executives keep churning out high quality business results?

 Time is Precious

The International Federation of Accountants (IFAC) says in a recent report that CFOs "need a broader perspective and a wider set of capabilities and skills" than ever before. Successful CFOs need to have a clear view of the big picture at their organization combined with ready access to up-to-date facts. To do this effectively, every core finance and accounting activity has to operate as effortlessly and accurately as possible. Reliance on too much slow, risky manual effort isn't an option. No one on the CFO's team can afford to spend too much time comparing numbers, searching reports and volleying emails.

The financial close process is one area CFOs should scrutinize for real improvement. It's one of the most complex activities in any organization. If precious time is wasted searching for financial figures or journal entry information, or analysts spend days pressing buttons and validating results instead of providing real analysis, then the CFO will suffer.

The challenge is that many financial close processes still rely heavily on this kind of manual effort. Even organizations that think they have eliminated as much manual effort as possible often find repeated tedious tasks devouring the time of some of their most important finance and accounting minds.  Much of this hidden manual effort hides in the middle stages of the financial close—in the corporate entity close processes. Here, manual tasks may take as much as two-thirds of the time and effort of the entire close, although they may also remain unnoticed. This is what I call “the undiscovered mile” of finance, and it is an obstacle that holds back many businesses and CFOs right now.

Eliminate Manual Effort in the Entity Close

Entity close tasks are repeated many, many times—often by highly-skilled finance professionals who spend hours eyeballing numbers and initiating tasks manually. They also typically must be completed with a high level of standardization. In fact, these areas can be automated quite easily with the right technology. With financial close automation targeted specifically at the undiscovered mile, the CFO and his or her team can institute new efficiencies at the heart of the financial close. This frees them from tedious, repetitive work. In the process, the CFO gains a broader perspective by relying on accurate, automated financial processes that deliver faster results.

Once these core close processes no longer require so much manual work from the finance team, it's far easier to dedicate more time and effort to more strategic business tasks. All of those new roles start to become more manageable. Financial analysts finally have more time to innovate as they should. With the freedom to choose when and where time needs to be spent, CFOs can embrace their ever-expanding roles as they grow their businesses and their careers.

 Neil Kinson is vice president of EMEA, Redwood Software.