What Are the Main CFO Challenges and How Do You Solve Them?

In today's rapidly evolving business landscape, Chief Financial Officers (CFOs) face a multitude of complex challenges that go beyond traditional financial management. From navigating the economic instabilities and uncertainties in regulatory changes to driving organizational growth and innovation, the role of the CFO is more critical than ever. CFOs must balance strategic planning with day-to-day financial operations, all while ensuring compliance, managing risks, and maintaining stakeholder trust. The following are some of the primary challenges confronting CFOs and practical solutions to address them effectively. By understanding and tackling these issues, CFOs can enhance their organization's financial resilience, optimize performance, and lead with confidence in an increasingly competitive environment.

Talent Recruitment and Retention. According to Gartner, up to 81% of the eligible workforce will be hybrid or remote in the future and turnover will be 20% higher moving forward. The shift to hybrid working has intensified the challenges for finance leaders. They must now balance productivity, employee satisfaction, and security while keeping expenses in check. To retain employees, CFOs may find it helpful to reimagine not just work but rather the work experience. Following are some potential building blocks of a hybrid-friendly finance function:

·         Implementing a shared digital environment. The workplace is no longer where the worker happens to be. Rather, it’s a shared digital environment where collaboration tools are used by a team. A shared common digital workspace is a new concept that allows both traditional and hybrid teams to streamline their work management by connecting employees, clients, and external collaborators in any location, and allowing projects, tasks, and work management, to be streamlined, audited, and centrally controlled. Additionally, this level of implementation aids in the creation and maintenance of high-performing teams - supporting connection and collaboration, as well as tracking shifting schedules.

·         Accessing an on-demand or offshore workforce. Some CFOs have instituted bringing aboard such workers during crunch periods, for example quarterly and year-end closes. Some companies also have used offshore talent as a resource to help meet peak demands. As a result, they can keep their existing talent, lessen burnout, and do so at a minimal expense.

·         Focusing employees on higher-value work. Several types of rote tasks, including accounts receivable and payable, can now be done more efficiently through process automation. This leaves the Accounting and Finance teams with more time for strategic work - adding value to their careers and the business. The 3Q 2022 CFO Signals survey found that CFOs who have altered, reduced, or streamlined the types of work their finance teams do — mostly through digital automation, leveraging technology, implementing ERP transformation, and improving or standardizing processes — realized several benefits. The top three impacts: more time spent on higher-value activities (78%), greater use of technology and automation (71%), and deeper insights into the business (34%). Surveyed CFOs also cited cost reductions, faster access to information, and higher-quality data.

·         Communicating authentically and often. There is no such thing as communicating too often when leading a virtual team. While leaders should make themselves available, they may also need to learn how to build trust with their teams, empowering them to take action and show initiative. The lack of visual cues or only partly visible body language may require leaders to be intentional in their virtual interactions.

Improve Cash Flow. Economic uncertainty often prompts businesses to streamline finances and optimize cash flow. Effective expense management, cost-saving measures, and tighter controls enable finance leaders to enhance cash flow by minimizing outflows and boosting profitability. Visibility into spending patterns, identifying areas of cash outflow, and taking prompt action to achieve cash flow objectives help to reduce hidden cash drains.

Financial Forecast and Planning. Finance leaders face significant challenges in predicting future market conditions, managing uncertainties, and maintaining organizational financial health. Leveraging hidden data and transforming it into actionable insights equips finance leaders with a detailed understanding of business activities, spending patterns, and necessary future changes, allowing CFOs to generate precise forecasts and project future employee-related expenses, facilitating improved corporate financial decision-making.

In navigating these multifaceted challenges, CFOs play a pivotal role in steering their organizations toward sustained success. By embracing proactive strategies, leveraging technology, and fostering a culture of innovation and compliance, CFOs can not only mitigate risks and manage uncertainties but also drive transformative growth. With a keen focus on financial resilience and optimized performance, CFOs are poised to lead their organizations confidently into the future.

About Sherrika

With over 15 years in corporate accounting within PE-backed and privately held organizations, Sherrika Sanders established Transform the GAAP (Goals Assigned Achieving Purpose) to leverage her knowledge and experience as an accomplished corporate accountant to develop accounting teams and high-performing women accountants, equipping them with the essential skills required to excel in any professional setting and advance their careers from stagnation to strategic growth. She helps realign accountants with who they are (values), how they show up (beliefs), and how to thrive in any professional setting (promotion) as they advance in corporate America. Sherrika was once in this same predicament and learned how to use her voice to get respect, recognition, and pay increases that aligned with her promotions. She wants to help other accountants do the same. Sherrika holds a Bachelor's in Accounting, an MBA, and a Master's in Organizational Leadership.

Sherrika's passion is to equip accounting professionals with the skills necessary to thrive in any setting. Visit https://www.transformthegaap.com/ to learn more.

The Transform Tuesdays newsletter was created to help professionals navigate the world of corporate America by overcoming the hurdles hindering them from growing to the next level in their careers, including knowing their value, using their voice, and being authentic to themselves.