With organisations looking at CFOs to be more than compliance experts, CFOs with a background beyond traditional accounting are in increasing demand — a trend you can expect to accelerate.
From just that of a bookkeeper, the role of a Chief Financial Officer has undergone a huge transformation, as organisations adapt to the fast-changing world. Rising global challenges, technological changes and slowdown back home have made the task more daunting. Here we list a few trends the CFO world may see during this year.
More operational role: The CFO will take on more operational responsibilities in the New Year blurring the COO position. In order to increase efficiency, organisations have been replacing their COO with an operationally focused CFO — a trend likely to pick up speed in 2020. In its report, AAA said its findings should put to rest concerns CFOs can manage their expanded role effectively. Among other things, it found financial reporting actually improved in some ways under a combined CFO-COO executive.
Accelerating the strategic role: CFOs have access to plenty of business data and analytics, which makes sense for them to assume more strategic decision-making roles. So CFOs are evolving rapidly into strategists and are spending less time drawing up and analysing past expense reports, and contributing more in future investment decisions. With digitalisation taking hold, the traditional CFO is turning into a Chief Future officer of sorts.
Batting the slowdown: Fear of a recession is another area of concern for CFOs. More than a third of CFO Leadership Council members have indicated that they believe a recession is likely in 2020, a result that is consistent with other surveys. A global survey of CEOs at the World Economic Forum shows most of the CEOs are pessimistic of the global economy this year. So CFOs are also becoming increasingly cutting-edge within their companies, improving cash flow by finding new markets and revenue streams, and giving their firms a competitive advantage through the use of technology.
Expertise in finance: As compliance needs increase, more finance professionals will rise to the CFO ranks with an MBA rather than a CPA. Along with the accounting function, the CFOs will have to pay attention to the reporting role. With organisations looking at CFOs to be more than compliance experts, CFOs with a background beyond traditional accounting are in increasing demand — a trend you can expect to accelerate.
Gaining the Artificial Intelligence edge: Corporate fraud is among the most critical and growing challenges companies face. There would be a shift to tighter, real-time monitoring and regulation of expense management. AI-powered, automated expense management will enable companies to automatically and instantaneously identify, flag and weed out any anomalous entries. The adoption of advanced technologies such as AI and Machine Learning will help companies enforce accurate reporting at scale and minimise revenue leaks.
Push towards automation: There will be a move towards complete automation as the manual nature of traditional claim processes has been tedious and time-consuming while the use of spreadsheets is inefficient. This will lead to complete automation of the expense management process, enhance user experience and free up employees for more core responsibilities.
Navigating the political landscape. Regulation and an unstable political environment that would lead to drastic changes in policies and laws are two more elements that are set to give CFOs sleepless nights this year. As the political environment gets charged up they will have to tiptoe around a minefield of sorts.