in: Company News
When the economy was at its low point, Chief Financial Officers (CFOs) had to become almost exclusively focused on finding ways to reduce costs and to ensure profitability as much as possible. Their focus was diverted from managing the financial state and challenges of the company. With positive changes happening in the economy now, CFOs can get back to focusing on this role. Without needing to be solely focused on cost reduction, they now face the challenge of looking for innovative ways to improve and protect the company’s finances while expanding the company’s financial reach. While there is much financial software available that can help with these processes, CFOs still face many challenges. Below is a list that CFOs spanning numerous industries have cited as their biggest challenges this year:
1. Cash management. Many of today’s companies are showing significant signs of growth in terms of profitability. As companies continue to reach profit goals and regain much of the revenue lost in the recession, CFOs are challenged to find new ways to redistribute cash so owners and shareholders remain happy. This requires CFOs to adopt proactive cash management strategies in order to correctly analyze the amount needed for future growth, capital spending, debt repayment, and dividends.
2. Healthcare. In the United States, the Affordable Care Act presents a huge challenge to CFOs.
3. Leadership Succession. As business owners ease out of their roles and execute their exit plan, CFOs are left with the extensive job of driving shareholder value. This often requires strategic change within the company, and it is the CFO’s job to thoroughly understand what drives the value of the company and industry. As the company falls under new ownership (whether it be from the next generation or an outside sale), the CFO is required to make the necessary changes to support the company financially during the transition.
4. Protecting Profitability. CFOs all around the world are responsible for ensuring their company remains profitable and continues on a steady path of growth. In order to support business growth, CFOs are required to review the cost benefit of investing in new technology or equipment and create a manageable staffing plan that can adequately balance the revenue growth with the owner’s expectations of profits.
5. Financial Visibility. The CFO is constantly challenged to “do more” and take on more responsibilities. In order to ensure that the financial functions of the company are operating efficiently and effectively, it is imperative for the CFO to offer financial insight into every aspect of the business and capitalize on that perspective. Building strong relationships with all departments (sales, IT, operations, etc.) within the organization will create more opportunities for visibility and influence.
If you are facing any of the above challenges, know that you are not alone. CFOs all around the world are struggling to figure out their role in their organization and how to best perform their job. There are many financial software solutions available to ease some of these challenges. If you are in need of more information or assistance to address your accounting and financial software needs, please contact us at Mindover Software.