The toolkit of a modern CFO
Aurum Solutions
Improve processes, cut costs, secure compliance. Meet the next-gen reconciliation software.
The job of a CFO is constantly evolving. Despite the challenges this brings, in the current climate, there is no time for these changes to be eased into. Navigating uncertain economic conditions requires informed action with instinctive urgency.
From data security to strategy, these responsibilities now predominantly lie with CFOs for the very first time. With the added weight of responsibility there also comes a heavier toolkit. This in itself is a challenge for finance leaders who will need to become experts in using unfamiliar tools.
Lack of previous experience with such tools can leave some CFOs unsure of which ones they really need, and of them, which will best suit their individual requirements. Fortunately, we’re here to share with you what CFOs should be looking out for when it comes to selecting their tech stack.
Automated reconciliation
For CFOs to fulfil their new role in leading strategic decisions, they must firstly find ways to reduce time spent on traditional tasks. After all, no matter how good senior finance leaders might be with numbers, they can’t create more time.
Of all the legacy activities which CFOs must attend to, reconciliation is arguably that which holds the most potential to be reduced in terms of time. This might sound like a challenge to some given reconciliation’s notorious reputation for being a time-consuming process; however, there is a way in which upgrading reconciliation can make room for everything else being landed on the plate of the modern CFO.
Automated reconciliation software such as Aurum Solutions’ handles millions of transactions to reconcile them and flag exceptions in seconds. Along with saving time through the actual action of reconciliation which can take days, Aurum possesses workflow management, enabling exceptions to be investigated in a more productive manner between colleagues.
As with any advanced piece of FinTech, adoption of automated reconciliation delivers more than just one benefit for those in financial leadership positions. For example, through Aurum making reconciliation a process which no longer takes up masses of time and is put off until month-end, it can instead be done weekly or even daily. As a result, CFOs are delivered a more accurate illustration of their cash position, allowing them to forecast with greater confidence.
In addition, reconciliation plays an extremely important role in what being a modern CFO is all about – strategising through informative data. It achieves this by collecting data from various sources and validating it, sifting out any instances of fraud. Without reconciliation, none of the added value which CFOs are now delivering for companies would be valid.
Within the modern CFO’s toolbox, automated reconciliation therefore really is the unsung hero. Despite on the face of it only achieving one result (a quicker reconciliation process), it impacts the work of those leading business’ finances in many additional ways from the creation of better forecasting, to laying the groundwork for data to provide the insights which will set CFOs and their companies apart.
Data warehouses and dashboarding & analytics
“Data is the new oil” was coined by British mathematician Clive Humby in 2006 and is continuing to hold true in every sense. On one hand it is driving huge change across numerous industries, on the other, it is causing emissions due to the vast amount of storage it acquires. Any collection of data therefore should create a positive impact to offset any negative emissions which they will automatically create.
CFOs are in a position of power to deliver exactly that. This is true not only because data quite literally turns everything – from customer demographics, churn rate, headcount etc. – into numbers (the bread and butter of finance leaders) but also because whether numbers go up or down nearly always comes back to what is spent. These factors, along with the growth or Big Data, are the biggest drivers behind CFOs being looked to as strategic leaders within companies.
Given CFOs’ numerical expertise, it is important that they are given tools which not only enable the collection of data but also create intuitive dashboarding for analysis to take place. With tools for data warehousing and data visualisation, CFOs can be armed with the insights they are expected to bring to senior management meetings.
When considering what data warehouse and dashboarding & analytics software tools to acquire, budget is always front of mind considering their expense, so as always, experienced financial professionals will have to do their well-rehearsed balancing act, considering factors such as:
Due to how all data should move through a reconciliation process to ensure it is valid, the inclusion of dashboards in reconciliation software is a natural match. This becomes even more conducive when considering that software such as Aurum is capable of extracting, transforming and loading data from any format. Plus, due to taking a partnership approach with all clients, Aurum also offers a bespoke dashboard creation service so that CFOs can clearly discover the insights which are important to them.
Tim Andrews, Chief Solutions Architect
Data is undoubtedly the fuel behind CFOs’ unofficial rise to Chief Strategy Officers within the corporate world. To fulfil their new remit, CFOs therefore require data software which is comprehensive and clear, providing collated insights from all departments. Only through having a holistic view of a company’s performance will finance leaders be able to transform the collection of data into actionable insights for the benefit of their businesses.
Data security
The rise of data which CFOs are responsible for only increases the risk of cyber security threats. As a result, data security is yet another duty which now lies with more financial leaders. Understandably, CFOs are by no means experts in this field which is traditionally handled by IT. Both guidance (which can be found here!) and the right tools are therefore needed to help finance experts with this very important duty.
This issue is often exasperated by the fact that an increasing amount of software which handles data is based in the cloud or online, heightening the risk of security threats. One way to overcome this is by using locally hosted software like Aurum which can still handle infinite amounts of data with significantly reduced hacking risks. For security conscious CFOs, this could be the perfect workaround for them.
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Alternatively, CFOs are lumbered with finding yet another piece of software to protect them from cyberthreats. A prime example of these are Security as a Service (SEaS) tools. Adopting yet another piece of online software might sound like adding fuel to the “cybercrime” fire, but some SEaS tools are especially good at what they do. It’s just a matter of knowing what to look for in one. Narrowing down the choice of SEaS is made easier when the following are considered:
Ultimately, as mentioned earlier when discussing reconciliation – data is invalid unless it is correct. With data being both invaluable and a highly sensitive asset, finance leaders can therefore not risk it being tampered with by outsiders. In a world where malware is rife along with other cyber threats, data security cannot be overlooked by any CFO who is looking to data to inform strategy (which is every CFO!).
Payroll and HR
Along with keeping the data of a company safe, another equally important asset to any company, which CFOs are finding themselves increasingly in charge of, are their people. Traditionally, this was designated solely to Human Resources (HR). However, despite the big clue in the name of HR, it has become apparent that finance plays a larger role in every employee at a company than first thought.
Payroll, expenses, taxes, and recruitment all are financial activities which are linked to people, and the list goes on. Whether those leading company finances consider it or not, assisting and even taken ownership of elements of Human Resources are therefore understandably now part of their remit.
With 1 in 4 CFOs stating that they’re becoming more involved in HR in recent years, in their toolkit they therefore require a form of software which allows them to assess people related activities through a financial lens. Software which can deliver this must meet a wide criterion:
Whilst every investment which a company makes is no doubt very important, how they invest in their human capital is arguably the most important. The collective expertise which HR and CFOs have regarding people and finance respectively means that through consulting one another, selection of an optimal payroll and HR package will have far reaching benefits for everyone involved.
Spend management
Despite all the other areas which CFOs attend to being very important, it all amounts to them being able to initiate impactful spending. After all, having regained precious time from repetitive tasks, unearthed and presented data insights to drive strategic business decisions, ensured the security of their treasure trove of data, and kept their companies' people operating smoothly, CFOs and their peers will be wanting to push things forward. For that, they turn to money.
However, as everyone ever responsible for money well knows, temptation and impulses can easily derail the best of spending intentions. Senior finance leaders therefore require tools to ensure that discipline which is announced by them in budget meetings are executed in real life too. This is where spend management tools step in. A good example of such a tool should have:
Through their investment in tools which gather them the means to advise upon business strategy, CFOs will be equally keen as other departments for insights to be enacted with the most impact. Whereas other parts of a business might interpret this as a wish to spend extravagantly, CFOs know that reason is required and a good spend management tool which will ensure that this is the case.
The time to tool up is now
CFOs have always been engaged with the handling of data; however, the modern CFO has become increasingly geared towards making data an impactful resource for companies. The crucial components within a CFO’s toolkit therefore aim to do more than just collect data – they elevate, protect, frame, and allow data to be applied in new ways.
Expected to make decisions which affect all areas of the company, the resources which finance leaders place in their toolkit must also be able to handle data from every department and transform it into a universal format so that comprehensive analysis can take place. This is a familiar challenge which CFOs will experience as they steer their companies onto a data-oriented path.
With the collection of data only growing by the second, and other areas within businesses not being as data-savvy as finance, CFOs need tools which are easy to set up and operate swiftly. In reality, no amount of manpower would ever be able to manually interact with data in a way which would fulfil the requirements of a modern CFO. Plus, even if it was possible, we’re not sure if any finance leaders would want the managerial headaches it would come with! To reap the benefits of data, and to stop being the bad workman who blames their tools, investing in contemporary software solutions is the way forward for CFOs leading their businesses.
If you're ready to evolve your CFO toolkit, take a read of the original blog post, amongst others, over at aurum.solutions and get the foundation for your data in place today, by booking your Aurum demo.
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