CFO challenges: 7 key problems and how to conquer them

What are today’s CFO challenges? Well, the role of a CFO has changed for good. No longer simply thought of as some just in charge of the numbers, you now have the tools and technology to become a visionary, plotting the course for the future of your business.

Already an essential member of the C-suite, you as the CFO have strategic business decision making as a key responsibility.

Alongside that are numerous challenges that you have to face. In this infographic, we highlight seven of the challenges that you face. Then underneath it, we go into more detail and offer advice to help you solve them.

1. Dealing with Brexit (and other global legislation)

According to a Sage research report, CFO 3.0: Digital transformation beyond financial management, where we took the views of 500 senior financial decision makers, 44% expected Brexit to increase regulatory burdens.

With the UK having already left the European Union (EU) and with discussions going on over a trade deal with it, you’ll already have assessed and prioritised the risks and potential opportunities that Brexit will bring in.

As well as currency fluctuations, you’ll also need to deal with what a proposed trade deal will look like, covering, for example, how your business raises finance in the future.

2. Tackling admin and productivity

The CFO 3.0 research says 70% of senior financial decision makers agree that admin hurts productivity. Your business will look at to find ways to fix this, and the answer is technology.

You should look at cloud-based financial management software, which can harness the power of automation for daily accounting tasks. In essence, 87% of financial decision makers are already comfortable with the use of automation for these tasks.

Essentially, future-proofing the financial industry is going to require technology innovations to provide even more automation.

Businesses understand the impact that financial management technology has in enhancing productivity. More than nine in 10 (94%) agree it will play a crucial role in tomorrow’s finance function.

Beyond the benefit for the finance department, it will also lay the foundation for better use of critical data and insights.

3. Coming up with new ways to help the business with financial matters

More of than half of financial decision makers (51%) say thinking of new ways to improve the business with financial issues is the most challenging aspect of their job.

Your role might be less about traditional accounting, with 94% of financial decision makers deciding their role has expanded over the past five years, and is no longer about fiscal responsibility.

They have better data tools at their disposal, such as real-time data, predictive analytics, immediate data access and a variety of information sources.

These tools provide you with new ways to quickly determine the immediate and mid-term commercial opportunities for the business, allowing you to adapt faster, take opportunities and effectively manage operations.

To achieve superior visibility of business performance, finance teams must have the tools and flexibility befitting the fast-paced, always-on era. Only then can they dovetail with all other facets of the business and collaborate as growth occurs.

Digitalisation provides advanced analytics to improve decision making, automation to improve processes, and metrics for improved real-time financial information.

Increased efficiency offers valuable insight into business operations to uncover growth opportunities.

4. Building a case to invest in financial management tech

The need for improved financial management tools is a catalyst for digitalisation. Indeed, more than two thirds (70%) of CFOs have full responsibility for digital transformation, a relatively new responsibility.

There are numerous pain points and an ever-expanding role in mastering – such as new data, technologies, and managing employee and stakeholder expectations. They are understandably concerned about how to bed down into their new function.

Also, 77% of financial decision makers will be unable to provide insights if they do not invest in financial management technology. And more than three quarters (78%) of finance leaders agree that if emerging technology is going to be transformational, they need the knowledge and resources for a successful deployment.

CFOs have become both the gatekeepers and king-makers to digitalisation. You must embrace your role as a leader of emerging technology, taking your place on the boardroom table.

You could witness a surge in progression that reverberates across the business. Don’t leave your business in the slow lane.

5. Tackling fraud and cybersecurity

The evolution of the CFO means you now have an integral role in data governance, data flow and cyber security, which means you’ll need to be active in performance analysis and innovating the business model.

This new remit will become key to unearthing cyber security and fraud. In the face of increasing cyber security attacks, it’s no surprise this is a priority.

Fraud, cyber misuse and data privacy protection now increasingly fall under your remit and the finance function.

What financial decision makers don’t always realise is that emerging technologies decrease the risk of data breaches.

Using the cloud creates enhanced levels of verification, securing data more comprehensively, as well as unearthing new commercial opportunities.

6. Lack of digital skills

As a finance leader, you should look to develop the skills that are essential to the future of your department and imperative to the changing industry. The task for the next generation of financial leaders is to manage a new landscape. You need the training and workforce to lead the charge within your organisation.

Delivering data-driven insights is another worry that keeps financial decision makers awake at night.

More than three quarters (78%) view technology literacy skills as essential to the future of their department, increasing to 86% in the financial sector.

More specifically, up to 31% are concerned about their lack of digital skills. The skills gap is felt keenly among finance professionals, especially with their enhanced responsibilities.

As such, two-thirds of CFOs (70%) still make decisions based on gut feel rather than data. Skills training is undoubtedly a factor for most CFOs, especially with the changing dynamics of the job.

You need a full complement of business, analytical, and data skills in your team. The need to harvest data rests on your team’s shoulders, so there’s an increasing requirement to upskill and use digital tools and cloud-based services.

Don’t estimate the change. But with the right systems and skills in place, finance teams will be able to operate more strategically to drive the business forward.

7. Dealing with concerns around automation

There is unease from financial decision makers who worry automation may replace their jobs (61%).

Finance maybe needs to rethink its traditional mindset. Rather than recruit finance professionals and try and upskill them with IT and data knowledge, they may need to look at non-traditional avenues.

It may be easier to hire data scientists and provide them with financial training. The skill-set should be closely aligned to allow a smooth transition and may also bring new blood and much-needed diversity into the profession.

Conclusion on CFO challenges

Emerging technologies, such as automation and artificial intelligence, are set to support the finance function throughout the digital transformation phase. This includes the creation of new jobs that will enhance the quality of working life.

Half of all respondents in the report (50%) agreed that emerging technologies would positively impact efficiency and accuracy. The most significant effects will be on data governance (48%), strategic and financial planning (48%) and efficiencies (47%).

Despite the challenges facing financial decision makers, the tools are emerging to help you tackle them.