As a follow-up to our recent But Who’s Counting? podcast episode, we’re looking at the state of chief financial officers (CFOs) and how the role has changed in the current business environment. As we transition from business recovery to business expansion, the role of a CFO needs to adapt beyond just financial insight to foster growth in their companies.
How Should a Modern CFO Operate?
The traditional role of CFO focused on building financial models for leadership to understand – whether that be through analyzing and preparing financial statements or reconciling income and expenses. A CFO in today’s environment has evolved to truly be a Co-CEO for the organization by helping the CEO make strategic business decisions. This may include scenario planning – should they acquire or be acquired? What does organic growth look like versus acquisition? This individual needs to be able to be fluid and get into the detailed forecasting of the business alongside leadership to best steer the revenue growth and financial stability in an upward trend.
Implications of the Talent Shortage on the Accounting Profession
With a decline in students entering the accounting industry, this creates a pain point for organizations trying to fill open positions with quality talent. Here are a few tips when it comes to seeking out new hires in the current workforce:
- Be Flexible. With an increased desire for remote work, you may need to look beyond individuals looking for a strictly brick and mortar environment. Work with your Human Resources team and managers to create flexible work that is more appealing to the masses.
- Think Outside of the Box. A potential new hire doesn’t need to have an accounting background or even be a CPA to be trained and mentored for the business. Look for candidates with a finance or general business background who are enthusiastic to learn the work and apply skills they already have.
- Seek Out a Talent Recruiter to Supplement Your Staff. If you’re finding limited responses to your talent postings, it might be time to outsource your recruitment to help you build your accounting dream team.
How CFOs Can Automate for Efficiency
As a CFO, another way to increase the value you bring to the organization is by staying on top of technology trends. Having the right software and systems in place will not only increase your bottom line but also free your time to be able to focus on growing the business instead of handling day-to-day operations. Here are a few ways your business can take advantage of technology right now:
- Cloud-Based Accounting Systems. Using advanced cloud-based systems automates your accounting function in a seamless, scalable process that is accessible online in real-time. These systems can also plug-and-play with add-on software focused on projections and cash flow forecasting to provide deeper financial analytics at your fingertips.
- Process Automation. Automating day-to-day tasks is another critical part of building efficiency in your team and business operations. With the talent shortage, it’s even more important to create processes in which repetitive or standardized tasks can be automated to create more time to prioritize the work itself. After you’ve set up three to four automated tasks, you may find that you can repurpose one or more staff members to do work that is more meaningful to their role and the business.
The CFO’s Role in M&A
Due to the amount of capital in the stock market, there has been an incredible level of merger and acquisition (M&A) activity that will continue at a fast pace. There are more potential buyers than companies to acquire – what does this mean for your business? Modern CFOs need to work alongside other business leaders to help guide the direction of the company with their financial insight and knowledge of the market. Here are two key steps CFOs should take to prepare their company for a potential business transition:
- Staff Retention. The value of your business relies more on the expertise of your staff and foundation of your culture than the owner his/herself. When an acquirer is looking at the overall health of your organization, having strong management in place and solid core values will only add to the likelihood of being bought.
- Consistent Financial Reporting. If a potential buyer comes knocking on your door, you want to make sure you can provide clean and thorough financial statements. These statements should also include documentation of internal controls and policies and procedures. This is an area that a CFO should make as a priority when an acquisition opportunity presents itself.
You can hear more about the changing role of a CFO from Beth Schulte, Principal and Director + Outsourced CFO, on the But Who’s Counting? Podcast. Subscribe now on Spotify or Apple Podcasts.
Whether you’re looking for interim high-level financial advice to navigate a business challenge or a more permanent CFO to guide the business strategy and oversee day-to-day accounting operations, the Anders Outsourced CFO team listens to your needs to find the best solution. Contact an Anders advisor below to get started.
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