The New Role of the CFO and Enabling Finance Function Transformation

Blog post

After years in an extremely pressurized, high-stakes business environment, many CFOs will face major hurdles to overcome residual challenges of this environment. In addition to these challenges, the role of the CFO has grown:

  1. In the scope of the CFO department’s responsibilities
  2. And the second, which is contingent on the first: is the CFO’s now critical contribution to the stabilizing, rebuilding and expansion of their company’s revenue streams and/or profits.

However, a major challenge lies in developing the ability and willingness of the CFO evolution beyond the traditional responsibility of the Office of the CFO of ensuring compliance with various statutory regulations.

Historical CFO Responsibility vs. New Role of the CFO

For the last 20 years, the primary role of the CFO has focused on ensuring compliance with necessary regulations.

However, last year was a defining year for the Office of Finance. With the impact of COVID-19 came a CFO evolution of their scope of influence: breaking out of the compliance box and stepping more into a role of an essential, strategic leader of the organization.

With the global economy in a state of disruption, the Office of Finance became responsible for providing real-time, business-critical insights to drive confident decision-making, while still maintaining their regular workload. To help their organizations overcome challenges brought on by the pandemic, these duties also became a part of the Office of Finance’s daily operations:

  • Exploring “what if” scenarios
  • Accessing cash liquidity
  • Being fluid with financial planning

New Role of the CFO Finance Function Transformation | Animated GIF showing a man at his desk with bar and line graphs on his desktop

If successfully managed, the CFO evolution dramatically impacts a company’s bottom line results. Suitably-equipped CFO departments that invest in finance function transformation fulfill these extended responsibilities can:

  • Improve cash flow and optimize cash reserves
  • Quickly increase the efficiency, control and visibility for all key areas of the financial close process, including balance sheet reconciliations, transaction matching, financial task management and controls and reporting
  • Influence productivity boosts in other departments

Recent Research From the Office of the CFO Revealed…

Trintech, a leading provider of financial close solutions, recently released a benchmark report that has identified an urgent need to further adopt new technology (automation in particular) to improve and streamline operations. These are areas the Office of the CFO has historically lagged behind other business units, with many still relying on spreadsheets and manual methods to support their financial close process.

Proven ROI of Finance Function Transformation

A core conclusion of the Trintech report is that lack of process automation and standardization lie at the heart of the problems CFOs now face.

For example, 88% of the research respondents cite lack of automation and manual work and errors as the reasons preventing them from having an efficient financial close process, while 78% of respondents reported that they still do not have mature automation in place for their financial close.

New Role of the CFO Finance Function Transformation | Bar graph depicting Lack of Automation 45%, Manual Work and Errors 43%, Lack of Standardization 24%, and Volume of Work 24%

According to the research, the flip side to this is that organizations that have automated the full Record to Report process with a solution such as Cadency® by Trintech have achieved the following results:

  • Reduced time spent on preparing and completing close tasks by 30%
  • Reduced the risk of revenue impact due to misstatements by 14%
  • Reduced time spent on journal entry adjustment by 75%
  • Reduced write-offs by 62%

New Role of the CFO Finance Function Transformation | Four animated pie charts depicting 30% Reduced Time on Close Tasks, 14% Reduced Risk Due to Misstatements, 75% Reduced Time Spent on Journal Entry Adjustments, 62% Reduced Write-Offs

With finance function transformation initiatives to supplement the new role of the CFO, the entire Office of Finance will be able to drive the strategic direction of the organization for the future.

Explore Trintech’s 2021 Global Financial Close Benchmark Report, which was based on the responses of more than 480 financial professionals across 430 organizations globally.