For the past ten years, the role of the CFO — in addition to their accounting team’s function — has rapidly evolved. The CFO is no longer regarded as simply a number cruncher but is now required to step into the role of financial strategist, and an interesting EY study, The Changing Role of the CFO, provides an in-depth perspective on this trend as it relates to financial close management.
Numerous issues can prevent a CFO from fully embracing their financial planning role. Typically, labor intensive, inefficient manual processes lacking visibility slow down their day when much of their time could better serve them and their company. The EY study stated that more than 60% of finance leaders expressed an overarching desire to free up their time for gathering information to support their decision-making. Additionally, other top challenges facing the CFO today include:
Therefore, because of all of the challenges a CFO currently faces as well as the changing expectations of the role, a CFO can’t afford to be involved in as much of the close process as they used to — time or cost-wise.
The answer to this issue is the ability of a successful CFO to be able to “trust and empower” their finance teams, as EY says in this study. One CFO involved stated that he could commit 90% of his time adding value by pursuing strategic over manual efforts.
“I have the team deal with the day-to-day issues,” he says. “I review monthly reports with the team and issues sometimes crop up. But I absolutely trust my finance manager, and I let her get on with it.”
Better close management methods are key to trusting and empowering finance departments. Instead of being wrapped up in manual close tasks and loose status updates, CFOs can gain visibility into their team’s effectiveness and therefore its profitability. And once a CFO can trust that their finance team has the proper tools to perform the close process, they can step into an oversight role and start driving the strategic direction of the company.
To discover how to handle your financial close management more effectively, click on the banner below for more information.
To read the EY study in full, please click here.
Written by: Ashton Mathai & Chelsea Downey