3 Tools Every CFO Needs
In a modern business environment, the role of the Chief Financial Officer (CFO) is rapidly changing. Traditionally, the CFO was in charge of closing the books and reporting on past events, spending their time looking into the past. Nowadays, the new financial leaders are shifting their focus to the future, becoming more analytical and strategic in their approach. To successfully reach the goal of an increasingly strategic role, CFOs need a wider view of the entire organization, not just the finance department. In a new era of finance, the primary concern of the CFO is no longer about balancing the books but rather about being trusted as the strategic advisor to the CEO.
The new CFO has arrived and, with it, comes the need for new tools to support their evolved role in the company.
1. Cloud-based applications
In a recent survey, more than 81% of CFOs viewed cloud-based applications as one of the best tools to assist them in their new strategically focused roles. One of the major drivers for the investment in cloud computing is the opportunity for cost savings, but the other benefits to this investment are the positive effects it will have for the CFO. Some of these advantages include the reduction of upfront investments in hardware and IT infrastructure as well as a major timesaving in processes such as budgeting.
Cloud computing budget applications, for example, offer a single, centralized model that can be utilized across the entire business, regardless of geographical region. The application not only speeds up the entire budgeting process, but also increases forecast accuracy, data quality and consistency across the entire organization. From the CFO’s perspective, cloud-based applications such as this one represent a win-win situation. Not only do they save the company time and money, but it also provides more accurate and detailed information to utilize in their strategic analysis.
2. ERP Solution
ERP, or Enterprise Resource Planning, is one of the essential tools to running a business. Form inventory to accounting to human resources, it encapsulates and integrates every major business function into one complete system. Information and processes are streamlined, resulting in a variety of benefits for the company.
An ERP system will help every employee, in addition to the CFO; do their job more efficiently by facilitating the ease of communication between different parts of the business. Similar to the benefits realized with cloud computing applications, the company is left with more accurate, real-time data, which leads to better decision-making skills by the CFO and CEO alike. One of the major benefits for a CFO is the improved compliance with financial and regulatory standards, consequently, reducing the risk of the company. With so many new aspects to the CFO’s job description, it can be easy to overlook updates to regulations or changes in the financial code. With an ERP system, this is not an issue.
With so many individual benefits, the cumulative reward for the CFO is access to accurate information that will enable them to make better decisions in a shorter amount of time, as well as lower the overall operational cost of running the business. If you are in the market for a new accounting software, check out this e-book by TGO Consulting: “Top 5 Tips To Selecting The Right Accounting Software”
3. Business Intelligence solution
With the emergence of the strategic aspect of the new CFO, it is important to have an overarching knowledge of the entire organization, not just the finance department. For this reason, a recent survey found that 78% of CFO’s have identified business intelligence (BI) as their top tech initiative for 2015 for a couple of major reasons.
The firstreason is to have the ability to see the entire organization. From marketing to sales reports to operational metrics, all of the important data needed to make decisions is all located in one place – right alongside the financial data. Secondly, BI solutions save time. Most systems have automatic alerts and pre-designed analyses that don’t require nearly as much data collection and analysis for the CFO or any other member of the organization. Finally, with more detailed data, the CFO is left with a more accurate report. Data is constantly updated and accurate, increasing a CFO’s confidence when reporting to the CEO.
These three tools get to the heart of the balancing act that the new CFO is forced to juggle. Instead of a purely financial focus, they are now in charge of strategic and analytical practices as well. For some CFOs, this may mean many extra hours at the office behind the computer. Others, though, who invest in these three important tools, will be able to eliminate redundant processes, consolidate their workload and focus their attention on the decision making process instead of the data collection. At the end of the day, the CFO will be better prepared to perform their job and the CEO will receive better strategic guidance, leading to a better overall performance by the company.
Bio: Deanna Ayres is the SEM Strategist and Community Outreach Supervisorat The Marketing Zen Group & TGO ConsultingShe loves to come up with new content strategies for and with her team and believes that connecting on a personal level is vital to success. Growing up in Europe has allowed her a unique insight into cultural differences in business & marketing. In her spare time she is a photographer, hobby cook with a love for coffee, gamer and geek. Follow her @deanna_ayres