10 Top Trends the CFO Office Should Watch Out For

Over the past couple of decades, the CFO’s office and how it works has undergone immense transformation. Businesses are rushing to scale, adapt, and leverage existing operations to build future-proof processes. Being the central decision-makers of a company, the modern CFO office is in transformation mode.

Their focus is on two core areas: 

a) Deliver on existing priorities with digital transformation

b) Keep an eye on finance trends to lead the organization in the next decade

Let’s focus on the top ten trends, both within and outside the finance function, to build the roadmap for a new-age CFO office.

Digital adoption in internal departments

In the wake of digital transformation, companies are gearing up for innovation. As the financial gatekeepers, the CFO office keeps track of departmental shifts. Forward-thinking CFOs continue to observe transformation, primarily in the marketing and sales teams.

These two departments are embracing change like never before. Hybrid selling, company-wide automation, and digital promotions steer their success story.

CFOs have an opportunity to create new business models to cater to the growing needs of various departments. Both money and resources must be allocated for this level of digital activity.

Zero-based budgeting

With an uncertain financial crisis looming over, zero-based budgeting (ZBB) is replacing traditional budgeting methods. CFOs are reimagining businesses from a zero base to address concerns around business strategy, value creation, and resource allocation.

McKinsey & Company, in its recent article, stated that “43 percent of the 127 CFO respondents recently surveyed cite the need to streamline their overall budgeting processes to react more quickly and efficiently.”

As CFOs prepare for yearly budgets, ZBB gains popularity to cut costs, have quick wins, and chart a new path to business continuity. Cloud computing and AI are also making it easier for CFOs to adopt low-risk ZBB models.

Renewed cash flow management

At the root of finance, timely and efficient cash flow management is a must. It is crucial that the CFO office become agile in cash collection and optimization strategies. Modern-day CFOs bank on increased financial literacy, driven by digital solutions.

Finance chiefs are creating an effective and flexible cash flow model to drive working capital inefficiencies. A survey by American Express India revealed that 2 out of 3 CFOs want to focus on digitizing the receivables and payables management. 1 out of 2 CFOs intend to focus on adopting better use of analytics for collection management.

Along with enhanced cash flow budgeting, high-performing CFOs ensure superior customer experiences to reduce friction and increase profitability. Modern cash flow automation solutions streamline end-to-end processes for both the company and customers.

Workforce and workplace transformation

The CFO is uniquely positioned to reinvent the culture within an organization. As the workplace gets disrupted with remote and work-from-anywhere policies, CFOs spend on cloud and management tools to ensure the flexibility of employees.

Greater emphasis is placed on diversity, equity, and inclusion (DEI) efforts to rethink workforce culture and hiring practices. It’s time to reimagine talent, reposition the workforce, and invest more in employee well-being and inclusion training.

As the leading force behind payroll and HR teams, CFOs need to think hard about what works for employees first.

Rise of self-service finance tools

The buzz in finance automation has inspired CFOs to rely on self-service tools to improve efficacy. Real-time updates and tool integrations are necessary for CFOs to manage challenges and operate easily.

Self-service tools and business intelligence are now a top priority. These emerging tools provide a high level of flexibility in analysis, reporting, and data visualization.

Intuitive tools with predefined report templates are beneficial for the CFO office to create ad hoc reports and KPI dashboards to support internal teams and external stakeholders.

Data visualization and governance models

Today’s CFOs lead the company with real-time data-enabled decisions. As per a survey by Accenture, 99% percent of CFOs believe real-time data is crucial to manage disruptions but only 16% believe they are fully capable of doing so.

High-quality data analytics and visualization remain a top priority for CFOs but it’s a challenge to deploy the right solutions. To unlock this trend, it is advisable to start sorting data functions within and outside the company to drive value.

With better data sources, a finance team will be able to optimize cash flow, forecast accurately, and integrate planning across business units. CFOs also need to define data standards and establish governance across data.

Increased focus on tech investment

Today, more than 40% of finance activities can be fully automated. Transformative technology is driving finance teams to ensure touchless transactions. CFOs have been driven to invest in automation and technology with the rise of digital technologies and remote working.

Forward-looking CFO offices focus on end-to-end digitalization by leveraging technologies such as pre-configured cloud ERP, RPA infrastructure, AI software, and data analytical tools. To support the CFO office, there are many cloud-based SaaS solutions available, including accounts receivable automation.

Predictive and real-time analytics

The focus of new-age CFOs has shifted from the traditional roles to analyzing how the company’s future can be steered. With predictive analytics, CFOs can predict possible disasters, put plans in plan to avert them, improve performance, and engage with different levels of stakeholders to identify opportunities.

A smart CFO uses a diverse data set to extract analytical output to generate growth and make better decisions. For example, CFOs deploy predictive analytics to assess business performance, detect emerging trends, and gather key insights.

CFOs also apply predictive and real-time analytics to generate value outside the finance function, including sales and marketing, supply chain management, and detect operational risks.

Innovative forecasting tools and models

Apart from managing cash flow, forecasting remains the top priority and challenge for CFOs. It is about how to influence positive growth within different business units to gain maximum value and revenue.

Only with successful forecasting tools and models, forward-thinking CFO offices find it easy to reduce transactional accounting work. The latest financial data and emerging trends are applied to roll out an accurate forecasting model.

In these rapidly changing times, successful CFOs use business intelligence tools for setting targets and managing time with periodic forecasting.

ESG metrics for business sustainability

New-age CFO offices focus on building environmental, social, and governance (ESG) sustainability metrics. The global pandemic has led CFOs to enhance their ESG priorities and reporting standards.

The link between business and society is on the rise. CFOs are increasingly adopting ESG disclosures to improve transparency with investors, employees, and stakeholders. People want to believe in the vision of a company that includes both company and community.

With ESG metrics becoming a crucial part of annual financial reporting, CFOs need to expand investments in sustainability and leverage opportunities with trending ESG initiatives.