Key Insights Into Post-COVID CFO Challenges and the Future of Finance

Blog post

Among its many other game-changing consequences, the global COVID-19 pandemic has brought into focus several serious CFO challenges concerning the future of finance teams and their organizations. However, new Trintech research suggests there are very mixed success rates for companies trying to transform finance for the organization as they rush to get to grips with the new demands now being made in a drastically altered CFO landscape.

Future of Finance and the Organization After COVID-19

CFO Challenge #1: Delivering Accurate, Real-Time Financial Insight While Working Remotely

A major challenge lies in developing the ability and willingness to move beyond the traditional CFO team role of ensuring compliance with various statutory regulations. Today, and in the future, it’s vital for CFO operations to be able to also make meaningful contributions to the formulation and execution of what are existential strategic, real-time, business-critical corporate decisions. Included here are key activities such as planning for different scenarios, accessing cash liquidity and fluid financial planning.

A second pressing legacy of COVID-19 is the requirement of CFOs to accommodate the pandemic-driven transition to more remote operations. Of the utmost importance in this area is the ability (with dispersed staff) to meet deadlines, maintain open lines of communication, and deliver accurate, real-time financial insight.

CFO Challenge #2: Meeting Organizational Expectations With Outdated Technologies

Related to, and a facilitator of both of the above is the increased need to further adopt new technology and automation to improve and streamline business operations. These are areas in which CFO teams have historically lagged behind other business units, with many still relying on spreadsheets and manual methods to support their financial close process.

A core finding of the Trintech research is that lack of process automation and standardizing accounting processes lie at the heart of problems CFOs now face. For example, some 88% of the research respondents identified lack of automation, manual work and errors as the top reasons preventing an efficient financial close process, while 78% of respondents reported that they still do not have mature automation in place for their financial close.

CFO Challenges and the Future of Finance | Insights | Bar graph depicting Lack of Automation 45%, Manual Work and Errors 42%, Lack of Standardization 23%, and Volume of Work 23%

Leading companies with advanced automation in place (defined as a comprehensive, end-to-end solution for the financial close) instill confidence in their employees, customers and investors. Additionally, the time saved by having advanced automation for the close process allows companies to focus their time on more strategic areas, including identifying new growth opportunities or making acquisitions or divestitures.

Where Are CFOs With Transforming Finance for the Organization?

Are these messages resonating with CFOs? Only partially it seems.

Trintech, an industry-leading provider of comprehensive, financial close automation solutions, conducted a global survey of 486 finance professionals across 430 organizations in 2021.

Key takeaways from the survey were:

  • Less than a quarter of organizations reported they have Established Automation (defined as point solutions for specific processes. For example a matching tool) or Advanced Automation in place for their financial close process
  • 78% of companies reported only having Basic Automation (defined as exporting spreadsheets from the ERP) or Developing Automation (defined as using advanced spreadsheet macros and limited Robotic Process Automation, i.e.: RPA)
  • 88% of the respondents identified lack of automation, manual work and errors as the top reasons preventing them from an efficient financial close process

Future of Finance and CFO Challenges | Bar graph depicting Established Automation 24%, Basic Automation or Developing Automation 78%, Lack of Automation 88%

The Trintech research also indicates that organizations that rely heavily on manual processes conducted in spreadsheets found it difficult to continue to do their jobs at the same level — let alone deliver on the new expectations required of them to provide real-time financial insight. This puts an extreme level of strain on finance and accounting teams that leads to more hours worked and high burnout rates. This is not sustainable.

The CFO needs to step back and focus on standardizing accounting processes and implementing financial close best practices, rather than try to maintain the unsustainable processes they were forced to adopt during COVID-19. Now is the right time for enterprise organizations to implement modern technology, such as financial automation or Artificial Intelligence, to automate the financial close, rather than continue to burn the candle at both ends.

The top takeaway from Trintech’s research is that those companies that try to go back to the way things were pre-COVID-19 are setting themselves up for failure. Investing in financial close automation solutions to transform finance for the organization is not only the future of finance and the organization, but now an urgent and essential initiative for companies across the globe.

Explore more major insights from Trintech’s Global Financial Close Benchmark Report.