As a CFO, are you prepared for the challenges your organization will inevitably face this year? At the beginning of every new year, and the end of every fiscal year, it’s time for companies to reflect on their accomplishments from the preceding period and establish new goals to work towards. And for the finance team specifically, the CFO is in charge of strategizing the path ahead.
But in order to set the coming year apart from the last, you must identify the obstacles that are coming your way.
Challenge: Data Security
In the fall of 2019, BDO surveyed CFOs and determined that the number one internal business threat expected in 2020 was data privacy. And in 2018, the average total cost of data breaches in the United States was $7.91 million. The consequences of a privacy breach, especially with financial information, not only affect your company’s reputation but can cost your company several million dollars in fines.
Safeguarding your financial data against breaches is crucial, and the use of Cloud-based solutions can help decrease the chance of a successful cyberattack on your company. A common misconception about putting your information in the Cloud is that it’s especially vulnerable to cyberattacks. However, Gartner states that most data breaches involve on-premise environments, and very few data attacks on the Cloud are successful.
Challenge: Economic Recession
In the same BDO survey, the number three business threat CFOs will face is a potential economic recession. 19% of CFOs thought the recession would occur in 2020, and 37% believed it would come in 2021. Especially recently, the threat of recession seems imminent, and every CFO needs to ask themselves if their financials are reliable enough to see them through an economic downturn.
Part of that reliability hinges on finance teams focusing on forward-thinking strategic planning instead of the manual processes that currently eat up most of their time. Allocating your accountant’s time to work on value-adding tasks, and leaving processes such as transaction-matching in the hands of an automated tool, allows finance departments to proactively strategize and form a solid base for uncertain times.
Challenge: Regulatory Compliance
Whether you’re a publicly-traded or privately-owned corporation, financial compliance is always on your radar. In a recent survey of global financial leaders, 40% admitted they didn’t trust the accuracy of their financial data. In that same survey, 69% of respondents said that they rely on spreadsheets to plaster over gaps in their reporting process.
Though spreadsheets are the most commonly used tool in the financial reporting process, they are not the most reliable. In fact, according to a study, up to 90% of all spreadsheets contain errors. And because of this, spreadsheets have been the root cause of many of the most infamous accounting errors. When choosing a tool to base your compliance framework on, spreadsheets are neither the most accurate nor the best.
Challenge: Resource Maximization
As a CFO, your job is making sure that not only is every dollar is accounted for, but every dollar serves the business. One of the most valuable resources at your disposal to achieve this are your employees.
However, the retention of those employees can be difficult. The Harvard Business Review revealed in a 2018 study that 55% of respondents acknowledged that their company’s workplace technology— the existence or absence of digital apps and platforms employees use to do their jobs—factored into staff’s decisions to accept, or reject, their job offers. Additionally, 51% said that outdated and inadequate technology impacted their ability to retain skilled workers.
In the field of finance, spreadsheets are becoming more outdated, and accountants are growing tired of using their high-level knowledge and skills to perform manual tasks that render them glorified data processors instead of working on value-adding tasks they are capable of performing.
The Solution: Financial Automation
Setting your company on the right foot forward is crucial to the health and growth of your business, especially in the face of all these challenges. Financial automation, rather than spreadsheets, is the most appropriate tool for your processes. Not only do automation solutions offer Cloud capabilities, but they provide a solid foundation to base your compliance framework on and allow your staff to move away from tedious, manual tasks, so they can use their array of knowledge for the higher-level tasks your company benefits from most.
To learn more about how automation can help optimize your financial close process, watch our on-demand webinar: How to Automate for a More Accurate, Faster and Cheaper Financial Close.
The Evolving Role of the CFO Series
Part 2: Is Your Finance Team Prepared For the Future?
Part 3: The Changing Role of the CFO
Written by: Ashton Mathai
 Leung, S. (2014, September 15). Sorry, Your Spreadsheet Has Errors (Almost 90% Do). Retrieved March 20, 2020.