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CFO Challenges 1.jpgThe CFO role is changing and those that embrace that change will successfully grow their companies. Last week, we identified five challenges we see for CFOs in 2017.  As the first blog in this series, we will help you anticipate and navigate the risks and opportunities the year brings.

More Strategic Focus

CFOs are at a pivotal point—facing changes in technology, regulations, tax structure and cybersecurity. We’ve seen these changes within our Middle Market clients. In the past, historical information and numbers were the most important things. But, those backward-looking financial metrics and traditional accounting functions have taken a back seat as the CFOs are called upon to be a more strategic force in the organization. They are also gaining more of an advisory role to other senior executives and their boards.

Sam Hartwell, CFO at KickStart reflects in a recent article how his and other CFOs’ roles are changing, “With the increased demands from regulators and stakeholders, managing compliance and risk has risen on the CFO’s agenda in recent years, along with other forward-looking areas. The modern CFO needs to be outward-facing—handling shareholder queries, liaising with the board and investors, and even speaking to the press for the company.”

This increased focus on strategic planning means their roles require more analysis and close tracking of key performance indicators and industry data to look ahead for growth opportunities. This transformation is exciting and the CFOs we work with are really energized by these new challenges. A new broader set of strategic and analytic skills helps them stay sharp and more satisfied.

Need for Real-Time, Actionable Insights

What does this mean to you? As you are called upon to be more of a strategic partner in the organization, you will need to rely on tools and information that provide meaningful insights to drive better decisions. In a recent Forbes article by Jeff Thomson, What to Expect As A CFO In 2017, the author interviews Thack Brown, the global head of line of Business Finance at SAP. Brown says “The time once spent balancing books is now spent interpreting and providing valuable insights.” With this changing role, he adds, “They will become increasingly dependent on automation and analytics to deliver real-time, clear, actionable and forward-looking insights.”

Technology is an Enabler

CFOs need to embrace technology advances to give them what they need to guide the company’s strategies and growth. Brown says, “With access into each function of a business, the finance department is able to not only maintain financial stability but also to help guide investment, review operational and business performance and mitigate risk. This expands the role of the finance executive exponentially, and provides the c-suite real-time access into the state and future of an organization.” Technology tools help CFOs assess risks and prepare for the impact that political, economic and social changes will have on their organizations. Applying predictive algorithms to their data gives CFOs foresight and intelligence to make mid-course adjustments and to lead the way in strategic planning.

Along with this increased technology comes the additional risks of cyber threats. CFOs need to increase their focus on protecting the organization and implement a regular schedule of intensive penetration testing. We work with CFOs in this capacity, so after our cyber team runs the pen test, we analyze the results and provide a prioritization of risks to help them make decisions.  

Is Your Current CPA Firm Still Equipped to Support You?

As your role has transformed, your CPA firm must be able to keep pace with the changes and give you broader support to ensure your success. Being more of an advisor to the board requires that you are more of a guardian of the whole P&L – not just from the cost side, but the revenue as well. 

To ensure you’re partnering with the right CPA firm, here are three key skills you should expect:

  1. Anticipatory viewpoint – Make sure you partner with an organization that helps you anticipate and act on industry and other economic opportunities. There may be threats of economic downturns, labor shortages, opportunities for tax credits or potential changes in regulations in your near future. You need to find a trusted firm that will stay vigilant for what’s around the corner.
  2. Analytics expertise – You need access to the right data as well as the best tools and processes for analysis and gathering insights to support strategic planning. Partner with a firm that helps you understand what data is most important as well as gives you the most advanced analytics support to more rapidly uncover trends and make mid-course corrections.
  3. Cybersecurity expertise - With cyber threats on the rise, look for a firm skilled in identifying the risk to your company—not just the blanket vulnerabilities but risk to your daily business operations, company brand and future growth.

Looking Ahead

As you move into 2017, make sure you are not a CFO that stays behind closed doors crunching numbers all day. You will need to expand your mindset and think more strategically. The CEO and board are expecting your insights. Quicker analysis will speed discovery of trends and accelerate time to market. It also enables you to uncover the best opportunity for an acquisition before your competitors.

Your changing role means you’ll have to stay on top of industry trends, follow the thought leaders and competitors in your field, talk to your peers and most importantly, make sure you are in touch with your customers to keep the company and its future direction relevant.

The HORNE Public & Middle Market team is ready to help you navigate your changing role.  To learn more about how we can help you, contact us

 

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THIS POST WAS WRITTEN BY Joe Green

Joe Green serves as an assurance partner at HORNE LLP. With a strong background in areas that impact publicly traded and middle market companies, he is dedicated to working alongside clients to manage deadlines and stressful situations for them, so they can focus on their future. Joe’s specialized experience includes transaction accounting, tax issues and issues associated with equity transactions.

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