10 factors impacting the future of the CFO

The office of the CFO needs reliable data visibility and streamlined operations to create future-proof processes that can confidently support an organization to drive strategy, create value, and make better decisions.

Keep reading to discover 10 factors that will impact the success and future of the CFO.

1. Managing changing roles in their funtion

It’s not just the role of the CFO that is changing, but as they change, they will have knock-on effects on the office they lead – from financial controllers to accountants.

For too long financial operations have been thwarted by inappropriate tools such as Excel that elongate data consolidation times and fatigue teams, while making data analysis an obscure experience.

To focus on the increasing requirement to be strategic, the CFO must also support their team to achieve this, empowering them with new technology to reach their united goal.

2. Talent Shortages

Recently, the AICPA found a decrease in the amount of accounting graduates and an increased number of retirees which has had knock-on effects for future years. 

As a result, many organizations are having trouble finding qualified accountants, with many finding that their accounting needs are not being met.

This has a knock-on effect on current talent, with an increased need to re-forecast, plan, and budget, these reduced teams can feel like they are being asked to do more than is possible with the tools they have - this can lead to burnout, and more importantly, financial errors.

CFOs must work to ensure that current talent is empowered with modern software tools that streamline financial processes, enable strategic thinking, and enhance productivity.

3. Retaining and attracting talent

As an additional concern to their current teams, CFOs must work alongside HR to ensure that they can attract tomorrow’s talent with attractive tools, processes, and workloads.

The office of the CHRO also needs data tools to provide a ‘data-driven’ culture to finance teams with a continuous feedback loop that sees action. An enhanced employee experience will retain today’s financial talent, while also attracting new talent with attractive HR processes and compensation packages that are led by data.

Moreover, the CFO must also recognize that future financial talent won’t be interested in using legacy systems like Excel but will expect next-generation tools, such as Cloud FP&A, that enable productivity and confident financial management.

4. AI automation

AI remains a growing consideration in nearly all areas of an organization, and use cases must be researched and understood, as well as ethical governance considerations, in order to be successful.

The CFO's importance as a tech implementer is clear in their implementation of AI as research from Gartner shows 34% of respondents identify CFOs as being involved in developing future Gen AI strategy in their organization. 

AI could play a role in solving certain issues in the office of the CFO such as talent shortages, increasing workloads, and an increasing need to be strategic. AI can, on a simple basis, reduce manual workloads on reduced financial teams by automating data consolidation – this provides time for strategic tasks, rather than burning staff out.

5. ESG reporting

Environmental, social, and governance (ESG) reporting provides governing and regulatory bodies an insight into the external impact of an organization on factors such as societal issues, the environment, and the economy.

This reporting of an organization’s environmental, social, and governance practices is increasingly being used by investors so that they know their investments are ethical and sustainable – this will be in place as of January 2024.

As a result, the CFO will need succinct ESG reporting procedures to ensure that they can meet compliance confidently, attract investment and partnership, but also to manage the data requirements without creating additional work for their teams.

6. IFRS 16

Like ESG reporting, IFRS 16 is a compliance measure and accounting standard in place that affects many organizations across the globe. The consequences of not meeting IFRS 16 compliance are serious, and CFOs must ensure they have the tools to do this confidently without creating large workloads.

IFRS 16 is arguably the most significant change to lease accounting reporting in over 30 years. Those still using legacy systems will struggle with ongoing IFRS 16 management, creating yet more manual work for internal finance teams. 

7. Collaboration

Importantly, not just to meet these compliance requirements with the cross-functional response they require, the office of the CFO needs to have methods to collaborate with other functions like HR, IT, and more, to enable clear strategic communication.

When data is integrated across functions everyone can benefit from a single source of data truth, enabling CFOs and their teams to easily communicate and collaborate with the necessary teams to ensure that strategy can be communicated simply.

When strategic thinking is enabled across an organization into other functions by collaborating with manufacturing, sales, HR, or IT, strategic tasks become much more unified and give organizations a granular level of insight into all their operations.

8. Cybersecurity

Securing financial data is a huge concern for the CFO, they must work with their team to ensure that they have not just tools, but processes, that encourage security practices to safeguard financial data.

Data breaches, accidental or malicious, can cause serious financial damage, and ensuring financial data is secured is a consideration where the CFO and CIO must collaborate.

Cybercrime evolves as quickly as technology, so this is a consideration that must constantly be re-evaluated with risk management and new tools. Moreover, technological innovations like AI automation can also open the door for cybercriminals and these risks must also be managed with success.

9. Enhancing accuracy

Recent research from Gartner shows that “Eighteen percent of accountants make financial errors at least daily, with a third making at least a few financial errors every week, and over half (59%) making several errors per month.”

The research suggests that this is not historical, but is due to an increased demand on staff, as well as a lack of talent leading to unmanageable workloads. 

Accuracy, and financial errors, have tangible consequences for the office of the CFO, and action must be taken to ensure that financial data is accurate and reliable. Workloads and demand must be managed for accuracy to be upheld.

10. Simplify international complexity

Many organizations may want to embrace international dealings and employees, each of which comes with its own compliance requirements that need to be managed.

Whether that’s forming succinct processes to ensure that factors like currency rates, etc., don’t create large workloads, or ensuring that your finance function can support international employees and their HR concerns – legacy systems will struggle with the complexity these requirements bring.

Final Thoughts

The office of the CFO is one of the most influential functions of an organization but must evaluate the tools at its disposal. They must leverage tools to identify objectives and priorities, integrate strategic financial planning and analysis processes, as well as analyze past performance and forecast future performance.

Organizations are generating more data than ever and with global talent shortages in, changing compliance, not to mention long-term market volatility due to supply chain and geopolitical issues, the office of the CFO needs digital solutions to navigate these issues and focus on driving strategy while adapting quickly to market volatility.