Recently, Consero’s female colleagues were given the opportunity to attend the Texas Conference for Women. So, we asked them what they experienced at the conference.

Deana Davis, Sr. Implementation Manager, said she really enjoyed Issa Rae’s keynote address where Rae stated, ‘’I realized I didn’t have the luxury of being tired,’’ in reference to the current state of affairs for Black women. “2020 has indeed been an awful year, with the deaths of icons such as Kobe Bryant, the pandemic, recession, and then all of the underlying racial tensions that are boiling to the surface,” said Deana. “It’s been exhausting for so many reasons, but her quote made me realize that I can’t give up, I need to be the change I want to see, and there is so much more that I need to and absolutely will start doing to have the conversations to make a change for my daughters and their friends in the future.” 

Erica Sanchez, Executive Recruiter, found the conference to be inspiring, thoughtful and empowering. “As a BIPOC woman [Black, Indigenous and People of Color, ed.] woman in HR and specifically, recruiting, diversity, and inclusion is something I take pride in. How do we contribute to creating opportunities for an underrepresented community but not only create opportunities, but also ensure we have a platform for all to succeed?” Sanchez loved hearing Melinda Gates say at the conference that, “We can’t be what we can’t see.”

Kristen Bridgeman and Bridget Howard are Senior Director of Product and Senior Director of Marketing respectively. They both enjoyed listening to Reshma Saujani. “Listening to Reshma’s discussion on being perfect was so inspirational. Too often, women are afraid to raise their hand or speak up because they haven’t formulated the perfect question or they are worried about what other people might think,” said Kristen. “She showed us that it’s more important to be brave than to be perfect. It’s okay to fail because failure leads to increased knowledge and understanding.” 

Bridget had a similar take: “Reshma’s discussion on perfectionism helped me see that re-wiring your mind for bravery is important. When we build courage in our minds, we can challenge those things that we fear.”

 

The first Tuesday of every October is Global CX Day (Global Customer Experience). This is a day when the CX community celebrates the professionals and organizations all over the world that offer great customer experiences. CX Day is an opportunity to recognize great customer work and to further strengthen the relationship between customers and their business partners. 

This week, Consero joins the CX community in recognizing all companies that offer supreme customer service. That’s because CX must be front and center in how companies best serve their clients and customers every single day of the year. Companies do well to focus on CX because it’s in their own best interest (Bain and Co. found that a customer is four times more likely to buy from a competitor if the problem is service related versus price or product related – source: CMSWire), but also because great CX is simply nothing more and nothing less than what every organization owes its clients.

Since its founding, Consero has had a strong company culture that embraces CX in every single department: sales, implementation, delivery and client success. Additionally, one of the new CX initiatives Consero has worked on over the past year is building out it’s Client Success team. This group is solely dedicated to helping customers achieve their financial goals and to insure Consero is being a good partner.

Client success is basically relationship-focused client management that aligns client goals with service provider goals to achieve mutually beneficial outcomes. Client success should not be conflated with account management, which constitutes more than anything else, a reactive problem-solving approach. With the customer success model there is a proactive focus on how customers can succeed (Nick Mehta, CEO of Gainsight, dedicated this insightful article to the important distinctions between the two). 

Currently, Consero is investing in client success software that will drive efficiencies in automation to further streamline and scale the Client Success team’s efforts. The goal is to provide useful resources and reliable support throughout the entire customer journey. 

“We exist for our clients.”

“We simply have no bigger assets than our own client base. They matter the most to us. Our clients achieving their goals with the help of our services will decide on the degree to which we thrive as a company,” says Chris Hartenstein, Managing Director with Consero who oversees the Client Success team. “We exist for them, and the existence of my team in our organization serves as a proof point for how management is convinced of the need to have a strong CX focus in everything we undertake.”

Consero is a 3x award winner of the 50 Fastest Growing Companies in Central Texas and has also received the prestigious Inc500 Award. The growth is due to having a relentless focus on Customer Success and value creation for Consero’s clients. “When we founded Consero, we established our Five Core Values, one of which is to “Wow! Our Clients,” said Bill Klein, President of Consero. “It’s fundamental that we are accountable to our commitments and deadlines. Our team always goes the extra mile to exceed client expectations.” 

“Thanks to Consero, we never skipped a beat.”

Here are some of Consero’s clients talking about the company’s commitment to giving them the best CX possible. 

Aleks Symanski, Scrypt CEO:

“Thanks to your team we haven’t skipped a beat during COVID-19.  In fact, we have completed our audit in record time. It is a true testament to the Consero team and the Finance as a Service model. I know 100 percent that if we had an in-house finance and accounting team, that would not be the case.”

Bryce Birdsong, ThoughtTrace CFO:

“Consero’s model is an example of how a partner can provide great value. We have been a happy customer for almost a year now. I can definitely see the value they provide in an M&A use case.”

David Moore, Smartech CEO:

“You guys have been great. It is unfortunate that we had to fix what that my old accounting team did prior to Consero. Their mistakes were painful but you all have been phenomenal.”

Thanks to today’s digital technologies, the finance sector is doing things that were previously unimaginable. Tools such as end-to-end multi-dimensional data access, for example, make it possible to enable complete visibility into both the enterprise and customer data. As such, the finance function within businesses will go from mere accounting and reporting to full-on predictive analytics providers. In doing so, they will also be offering increased value to their business partners; increasing their competitive advantage.

The next generation of digital finance will deal with analytics to create additional value and manage risk. This will shift the focus from traditional accounting and processing to cross-functional integrated service models that will also use robotic process automation. This digital reconfiguration will push finance as an insight generator for their respective business partner. There are three main elements that will influence this transformation:

• Analytics Competency – This service goes beyond just analyzing financials. It will also assess product management, customer expenses, as well as the project trends for the future. Employees will use self-service to explore data in real time so as to better understand the financial effects of their business decisions. In other words, they will no longer have to rely strictly on the finance department to do it for them.
• Integrated Business Services – This bundle of services will include both accounting and transaction processing, coupled with tasks typically found in other business areas and functions. It’s estimated that by the end of 2020, over 80% of traditional finance services will be covered by cross-functional teams.
• Communications and Control Center – Control, compliance, communications, and risk management will be covered by these centers. They will consolidate fundamental functions such as statutory accounting, tax, treasury, compliance, and investor relations. A digital data warehouse will automate most routine tax reporting and compliance, allowing tax professionals to focus on optimizing the company’s tax structure and make it more in line with the company’s overarching business strategy.

Given these trends, financial planning and analysis (FP&A) leaders are under increased pressure to deliver more accurate and timely financial analysis. To do so, they will need to focus on four key areas in order to step up their financial analytics capabilities. These include:

• Better planning and budgeting
• More integrated financial planning
• Performance reporting
• Modeling and forecasting

By being able to generate insightful financial analysis in a time-efficient manner, financial leaders will become a valued and trusted business partner. Analysis plays a key role in today’s digital business environment, allowing companies to keep pace with all the challenges and future trends that haven’t yet been anticipated. Below is a short rundown of all the four aforementioned areas that need to be addressed in order to implement state-of-the-art financial analytics.

Planning and Budgeting

When a business constantly resorts to spreadsheets to conduct their operations, it’s a strong indicator that they work with an underdeveloped budgeting process. The less companies rely on Excel, the more they tend to favor purpose-built FP&A solutions capable of providing common database management access, data scenarios, and related workflows management. These types of solutions will also offer a much higher degree of transparency.

Immature financial planning capabilities tend to take up to nine months before they can produce any meaningful results. In most cases, however, this large time discrepancy will mean that the results will be outdated and/or irrelevant. This is particularly true in today’s fast-changing and evolving business environment.

Aside from the constant use of spreadsheets, other signs of a lagging budgeting process are very little financial data analytics, simplistic reporting capabilities, and limited transparency and visibility into business value insights. A higher level of maturity in this regard is characterized by a focus on business drivers that influence the financial line items.

Integrated Financial Planning

The majority of finance departments are only now starting to mature in terms of integrated financial planning (IFP). This is the main reason why so many finance departments struggle to generate any meaningful business insights in any timely and/or accurate manner. By comparison, a higher level of development in terms of integrated financial planning will also translate into more collaboration with other business departments. For instance, a well-developed IFP program will be able to target specific financial-planning objectives from external business areas and generate new insights that will be useful for the sales team.

Performance Reporting

Another telltale sign of immature and underdeveloped finance functions is when they struggle to understand why their generated financial reports are the way they are. Spreadsheet deliverables will tend to only focus on accounting numbers. They lack most external inputs and financial data analytics. This makes it incredibly difficult to generate any meaningful insights. While less mature FP&A capabilities tend to rely on traditional planning and budgeting tools when it comes to forecasting and modeling, more mature reporting capabilities would take a more comprehensive approach. They will be able to capture and integrate a wider array of information from multiple sources than their more traditional counterparts.

Modeling and Forecasting

While traditional FP&A capabilities tend to rely on static planning and budgeting tools for modeling and forecasting, advanced capabilities leverage in-memory computing (IMC) and advanced analytics to provide faster and more reliable predictive analytics. They can also make real-time adjustments and place a higher emphasis on high performance. Less mature FP&A capabilities, on the other hand, have an extremely difficult time coping with highly complex business environments. To provide greater maturity in these areas also implies the possibility of providing faster and more accurate analytics capabilities that are able to provide real-time adjustments.

To smooth implementation in line with their strategic plans, CFOs will have to avoid some of the most common pitfalls related to accurate forecasting. These include the following:

• Update Prioritization – Many CFOs will feel tempted to make too many changes too fast. They will try implementing new technologies while changing incentive schemes at the same time. However, it’s a far better alternative to clearly define which forecast variables will be updated and how often, even before the transition takes place. So, for example, if a transportation company will define its forecasting schedule based on the attributes of each variable, the finance team will decide on the right update frequency based on each of those variables’ volatility, economic profit impact, and the level of control they will have over the response.
• Gradual Implementation – When looking to transition towards rolling forecasts, it’s best to look at it as an evolution and not as a single event. The many challenges that can arise during such a transition are rarely anticipated by finance leaders who look at it as a sort of one-time adjustment instead of an iteration. It’s far better to create a comprehensive outlook of your current processes and mitigate your management’s resistance to change. You will also need to help your line managers improve their forecasting consistency over time. It’s important to keep in mind that progressive companies will make many adjustments over the months and years following the initial adoption of rolling forecasts.
• Spending More Time on Analysis – Companies tend to spend more of their time and resources reviewing and creating forecasts than actually analyzing the information generated by those forecasts. But at the end of the day, it’s the output that counts and not the mechanics that made it happen. It’s important that you collaborate with your senior leaders and determine how they will use these rolling forecast reports to better handle their mid-cycle resourcing decisions. You will also have to integrate risk and opportunity assessments into your overall forecasting process. In addition, consider using scenario- and range-based forecasting to focus your attention on the key business decision drivers for each of your business units.

Look Towards the Future of Finance

Once application leaders have successfully addressed the current maturity of the abovementioned FP&A processes, they will be in a far better position to create effective roadmaps in terms of which upgrades ensure that they understand the questions your business partners will be asking in the future. As more and more analytics solutions are enabled by artificial intelligence and machine learning, finance will become an increasingly tech-oriented field.

Consero will provide insight and a robust financial solution that will help your finance teams get a clearer picture and make more informed business decisions, preparing you for this competitive landscape. Our ultimate goal is to help CFOs and CEOs make better decisions when it comes to the future growth and security of their organizations. Unlike traditional outsourced  bookkeeping and accounting, Consero provides FP&A support which includes an in-depth analysis and evaluation of your company’s financial position to better devise an effective growth trajectory.

Consero’s history as a successful growth strategy development partner relies on its Finance as a Service (FaaS) platform which includes a cloud-based software stack, aside from its in-depth understanding of finance, accounting, bookkeeping, market trends, and FP&A services. It also relies heavily on data-driven business intelligence and on a highly-customized, transparent, and unique approach towards business growth.

 

For a very long while, new market entrants found it difficult to break into the financial service industry. However, this is not the case anymore. FinTech (Financial Technologies) disruptors, which are fast-moving tech companies focused primarily on innovative technologies and processes, have been making significant strides into the financial sector by leveraging business insights and undergoing digital transformation. Over the past five years, the impact of new technology on financial services has been tremendous, leading to many success stories in the sector. In order to remain competitive on the market, many businesses today are compelled to move away from their traditional financial practices and embrace a more agile and innovative approach.

From 2020 onwards, financial institutions will start leveraging more and more technology trends as a means of building new business models. Statistics indicate that the financial technology market is growing at a continuous rate. In 2018, the FinTech market was valued at around $127.66 billion, and by 2020, it’s expected to reach $309.98 billion. That’s an annual growth rate of 24.8%. In 2019, the FinTech adoption rate around the world grew by around 64%.

Current Challenges Facing CFOs

Due to the Covid-19 pandemic, the many challenges facing today’s CFOs are quite complex. From a regulatory point of view, CFOs need to manage their financial regulations, tax laws, risk management, as well as their labor and contracts. In addition, the global economy is having a much greater influence on the day-to-day operation of middle-market organizations. This increased complexity only puts a greater strain on most companies and requires their CFOs to streamline their performance by leveraging tools that will allow them to operate quickly and effectively on the global market.

Rapidly-evolving technologies can help to alleviate these problems by increasing efficiency and productivity throughout the organization. And while these technologies used to only be affordable for large multinationals, they are now available for middle-market organizations as well. It’s been some time now since finance professionals have realized that automation and digitization will be the key to their ability to drive performance.

In the meantime, the role of CFO has also evolved. It went from simply tracking and controlling revenue associated with finance and accounting to a more company-wide strategic role. Being more management and planning-focused, the CFO can leverage financial services technology tools to increase both business value and growth. They can do this by:

• Enabling more sophisticated levels of data collection and analysis. In doing so, they will be providing actionable insights into growing the organizations and provide them with a significant competitive advantage.
• Connecting departments, functions, operations, and individuals across the entire organization and in real-time, increasing visibility and access to relevant information.

Technology as a Success Enabler

Several existing and emerging information technology and data science applications are set to enhance the value of finance functions, as well as other key areas within the business. These will help CFOs further elevate themselves as strategic leaders in their respective organizations. Many finance professionals have recognized the need to take advantage of these emerging financial services technology to build stronger financial processes and data analytics.

Robotic process automation (RPA), for example, was shown to offer huge potential in terms of financial integrity and continuous improvement. This artificial intelligence (AI) and machine learning (ML) technology is able to deliver actionable and real-time business intelligence, all the while capturing process efficiencies that weren’t possible before. Yet, in order to capture these benefits, CFOs will have to identify which innovations are attainable for their organizations, as well as be able to justify the costs of these new solutions in a tangible way. Gartner predicts that robotic process automation (RPA) will eliminate roughly 20% of the repetitive and “non-value-added tasks” within the finance department by 2020.

What is Finance Technology Optimization?

Plenty of middle-market financial service providers leverage an enterprise resource planning (ERP) platform to manage and connect their business across the enterprise. However, these on-premise ERP systems are being steadily replaced by cloud computing solutions. These modern solutions have allowed middle-market companies to monitor and measure the effectiveness of their business, as well as drive efficiencies and cost-saving capabilities.

Many CFOs believe that there is plenty of room for improvement in terms of their ERP solutions, particularly in terms of their reporting and analysis capabilities, integration, customization, and ease of implementation. Mobile technology can also help improve the performance of finance organizations by delivering on-demand reporting, as well as timely data analytics that help in decision-making.

When it comes to finance technology optimization, companies need to find ways to extract more value from their accounting and enterprise resource planning (ERP) system, while also adopting new technologies able to improve their finance processes. FinTech literacy is still in its early stages, meaning that businesses will have to rely on their IT departments or external partners capable of providing them with all the benefits that FinTech has to offer.

Unfortunately, however, finance technology implementation takes too long. In fact, around 66% of CFOs report a lag in their tech investments ROI. This is due, in large part, to the overly long implementation process. In fact, only about 24% of all CFOs feel confident enough in their ability to overcome this challenge. In the meantime, however, slow adoption rates will continue to stifle the overall effectiveness of this emerging technology’s function.

Finance Technology Implementation

While ERP systems, cloud applications, and mobility are beneficial and essential for CFOs to do their job, several other emerging technologies can help enhance visibility of data and analytics capabilities, in order to get a competitive advantage. Big data is a significant tool to help finance organizations sift through and discover actionable insights for huge volumes of information that most organizations now possess. As such, CFOs need to get involved in data management and governance so as to better understand the data available and how it can be analyzed and used for better decision-making.

By implementing an effective big data platform, CFOs can identify behavioral patterns and trends, predicting future behavior of their employees, partners, and customers. This data can be used for enhanced wealth management, as well as to establish better internal financial control over key processes and information, and to create a mechanism used for industry comparisons. The ultimate goal here will be to enhance the organization’s operational performance. Big data can also be used to drive change within the company by providing more clarity to highly complex information and a more comprehensive overview of organizational analytics that are able to strengthen business processes.

Finance leaders should also assess the potential of both cognitive and predictive analytics within their organizations. While predictive analytics helps to forecast potential risks and outcomes from existing data trends and real-time information, cognitive analytics will provide additional learning capabilities to enable more efficient data analysis and help with decision-making.

To further optimize big data within the organization, finance leaders will need to leverage data visualization technologies that are able to present complex information in a more easily-understandable format for users. This will help your organizations better understand and analyze the key trends and metrics, as well as determine your financial drivers. Additionally, data visualization will help CFOs develop more compelling insights for various stakeholders that are outside of the finance department.

Analytical tools can also be used to increase the speed of dissemination and reporting of data. There are plenty of middle-market technologies that will allow CFOs to make better sense of the large amounts of data and translate them into actionable insights that the company can use. These technologies have allowed many CFOs to expand their responsibilities and drive significant value for their companies.

As the financial demands of organizations become more complex, the role of the CFO has never had as many responsibilities. While some tools can increase efficiency and visibility, others will enhance the company’s analytical capabilities. Finance organizations need to be tech-savvy enough to leverage and optimize it, as well as drive strategic initiatives based on enhanced data insight and analysis. By understanding your available options and by developing the right technology roadmap, you will be able to take advantage of the necessary emerging technologies and the many benefits that they have to offer.

How Consero Can Help Guide Your Company

Consero has a long history of developing a successful growth business strategy for its partners with the right technology solutions. While there are other organizations out there that provide FP&A services, Consero also has its Finance as a Service (FaaS) software platform. It provides a unique and transparent approach to business growth. In addition, our financial experts can support you in terms of banking and financial leadership, decision-making, financial data analysis, planning, budgeting, and forecasting, as well as acquisition integration support, among other such finance services. Contact our team at Consero to schedule a free demo. We’ll walk you through our guiding principles and processes and what you can expect as a Consero partner. We’re ready to answer any questions you have on improving customer experiences, optimizing management systems, and actionable business insights.

 

Over the past several years, emerging technologies have had a significant impact on finance organizations. Companies feel increasing pressure to let go of their traditional financial practices and follow a more agile and innovative approach so as to get a competitive advantage. Going into the new decade, more and more companies will leverage Financial Technologies (FinTech) in order to build new business models.

This trend is not surprising, however, as the Financial Technology market is continuously growing. In fact, according to recent reports, the market was valued at $127.66 billion in 2018 and is expected to reach $309.98 billion by 2020. In addition, the adoption rate of FinTech around the world in 2019 was at around 64%. Below is a rundown of some of the most successful emerging technologies that lead to digital transformation in finance.

Top Emerging Technologies in the Financial Services Industry

The following are the most noteworthy finance technology trends to look out for in 2020 and beyond. They are set to help finance organizations deal with existing issues, as well as tackle new challenges. These financial service trends will be able to help all types of financial institutions implement security, deliver convenience, build trust with customers, and improve accessibility, among other such benefits.

Cognitive Technology

Artificial Intelligence (AI) and Machine Learning (ML) cover multiple aspects of the financial service business and will find plenty of uses in the industry. By 2035, Artificial Intelligence technology is expected to increase productivity by up to 40% and profitability by 39%. Thanks to its cognitive abilities, AI can help financial organizations detect frauds, identify data patterns, manage risk, and help stakeholders make more informed strategic decisions. In addition, Artificial Intelligence can also help consumers customize their financial products, perform budget analysis, and realize the best digital payments.

Conversational Chatbots

While chatbots have existed for some time now, they have lost their appeal in recent years because of their inability to deliver human-like, personal experiences. However, with today’s Artificial Intelligence technology, chatbots have returned to the market. In fact, it’s predicted that superior chatbot interactions will grow in the finance sector by 3,150% between 2019 and 2023. In addition, they are expected to manage over $2 trillion worth of assets, while AI will power over 95% of customer interactions over the next decade. 

Finance professional organizations will be able to use these conversational AI solutions to deliver better customer experience as the technology will be able to learn from the existing database and ongoing interactions. As such, it will be able to provide customized answers and relevant suggestions.

Blockchain Technology

Companies accessing finance technology are increasingly turning to blockchain to have access to enhanced operational efficiency and security. This type of technology involves the implementation of a distributed database that is accessible to all users within a network and where they can add new records with unchangeable timestamps. This feature will maintain data authentication by restricting any changes to older data blocks, increasing both security and transparency in the process. It will also enhance trading accuracy, speeding up the settlement process and reducing overall risks. By the end of 2020, some 77% of financial organizations and 90% of payment companies plan to integrate blockchain technology into their operations. By 2024, blockchain technology is also set to reach $20 billion.

Data Analytics

Data plays a fundamental role in the finance industry. And when this information is properly mapped with data analytics technology, it is sure to deliver increased business value. Financial data analytics enables organizations to better process enterprise-wide data, while also gaining actionable business insights, risk management, product development, fraud detection, and more. The technology will also help finance organizations analyze their past performance, optimize their current tasks, functions, and processes, and better prepare for the future. It’s widely accepted that the future of finance will be marked by a huge increase in financial data collection in order to build a smarter and more agile organization capable of identifying and taking advantage of more opportunities.

Robotic Process Automation (RPA)

Robotic process automation (RPA) is yet another artificial intelligence and machine learning technology that’s capable of delivering real-time actionable insights, while also capturing process efficiencies that were possible before. RPAs can help finance organizations to automate repetitive and highly data-intensive tasks, which makes the technology useful in reducing manual dependency and latency. In doing so, companies will be able to increase their productivity across multiple finance verticals. Gartner predicts that RPA can eliminate around 20% of repetitive and non-value-added tasks, as well as drive between 25-50% in terms of cost savings.

Cloud Computing

Cloud-based software-as-a-service (SaaS) can be used for non-core business processes. Among these, we can include HR, financial accounting, or CRM. Cloud-based SaaS can also be used for “point solutions” on the outskirts of the operation, such as security analytics or KYC verification. As this type of technology improves, COOs, CIOs, and CFOs will become more comfortable with these services, and the core service infrastructures in areas such as credit scoring, consumer payments, statements, and billings will become utilities.

The Key Initiatives in Finance Function

The top priority for the 2020 Chief Financial Officer is finance analytics, finance organization strategy and structure, and finance technology optimization. Along with improving operational excellence and implementing the digital transformation, the role of the CFO will also be to help grow the business and overcome the aforementioned challenges. It’s important to keep in mind that for many finance organizations, reports and analyses have insufficient forward-looking information. In addition, the finance organization structure currently limits the responsiveness to today’s fast-changing business needs and technological investments, which results in long payback periods and minimal returns on investment.

Handling Finance Analytics

Despite having a high degree of spending in finance analytics over the past several years, only a handful of finance organizations have actually been able to attain a high level of maturity in implementing advanced analytics. Not only does this make it hard to assess the real impact and ROI of financial data analytics, but the current status quo in matters of operating models will prevent the effective use of advanced analytics capabilities.

Finance leaders looking to implement these tools should initially consider pilot projects instead of large analytic investments. The CFO’s role in this regard will be to identify which advanced analytics projects that are also connected with their business problems have an available financial or nonfinancial dataset. And as these individual projects start demonstration applicability success, larger finance analytics projects can be pursued and implemented.

Once they are able to provide financial analysis insights in a timely manner, finance organizations will also start becoming a more valued and trusted business partner. Advanced data collection and analysis will play a crucial role in today’s global economy and increasingly digital world. It will allow businesses to keep pace with all existing and future challenges. To take advantage of these benefits of advanced analytics, business leaders will have to address the following areas:

• Planning and Budgeting – Immature and underdeveloped financial planning capabilities usually take up to nine months before they can produce any meaningful results. This huge time discrepancy will often mean that the generated data will be outdated. Regular use of spreadsheets, limited financial data analytics, reporting capabilities, and visibility into business value insights are all signs of a lagging budgeting process. The less companies rely on traditional finance tools and, instead, favor purpose-built FP&A solutions, the more they will have access to a common database management, data scenarios, and related workflows management.
• Integrated Financial Planning – Most finance departments have been using integrated financial planning (IFP) for a very short while. For this reason, many finance organizations struggle to generate timely and accurate business insights. With a well-designed IFP, companies will be able to target specific financial planning objectives, as well as generate new insights useful for the sales department.
• Performance Reporting – Since most spreadsheet reports are largely focusing on accounting numbers and lack most external inputs and financial data analytics, it’s incredibly difficult to generate any meaningful insights. Mature reporting capabilities, on the other hand, will be able to capture and integrate more data from different internal and external sources. In doing so, they will enable businesses to understand the why behind the results generated.
• Forecasting and Modeling – Traditional FP&A solutions rely mostly on static planning and budgeting tools used for forecasting and modeling. Advanced tools, on the other hand, use advanced analytics and in-memory computing (IMC) to generate faster and reliable predictive analytics.

Finance Organization Strategy and Structure

As finance is facing increased pressures to keep up with today’s rapidly evolving business environment, the role of the CFO is to understand where and how to employ different strategies and take advantage of the current available technology trends. To do so, the modern CFO will pay close attention to how to reduce duplication and how to provide more comprehensive and coordinated support to their business.

With companies expanding into the global economy, they will also be served by a more complex organizational structure. When this happens, they will need to put a higher percentage of their finance workforce in different business units. While centralization is still necessary, there are certain scenarios where finance leaders should consider the type of service delivery model best suited to support their overarching business strategy.

Some organizations will choose to work with shared services and opt for a center of excellence (CoE). Others may find it more effective to divide their responsibilities between the corporate and embedded finance teams. Since there is no one-size-fits-all approach to the issue, companies will need to choose the one system that will be able to balance the company’s financial and human resources, all the while keeping in line with the competing governance and guidance responsibilities.

After determining the desired level of centralization within the company’s structure, there are several other key aspects of the finance functional organization that need to be redesigned. These include:

• Start by assessing the current finance structure, including the company’s spend, staffing, technology, productivity, and performance. This will help you anticipate your future business needs.
• The following step will be to determine the activities that need to be outsourced to a capable and professional business partner.
• In addition, you will need to ensure that the structure will be based on your functional priorities, and you will need to clearly define what the scope of activities will be for each sub-function so that you will avoid any duplicates.
• Lastly, you will need to choose the right reporting structure used for embedded finance teams and optimize the spend of controls. You will need to use role definitions, performance measures, and incentives to drive desired behaviors. These methods are usually more effective than just rewarding reporting lines.

Finance Technology Optimization

The process of finance technology optimization refers to extracting more value from accounting and enterprise resource planning (ERP) systems while also undergoing a digital finance transformation. However, finance technology literacy is still at its beginning stages, which leads to an increased dependence on the IT department and various other external vendors. Therefore, finance technology implementation will take too long and will result in minimal ROI. This slow adoption rate is a serious challenge, and only about 24% of CFOs believe in their ability to solve the problem, while 76% report lagging return on investment from FinTech investment due to prolonged implementation. Yet, new technologies, such as robotics, advanced analytics, cloud computing, and more, can greatly improve the ability of the finance department to deliver real-time business intelligence and enable new process efficiencies. 

The New CFO Team

As the role of the CFO will continue to expand, CEOs expect them to take the initiative and apply financial analytics to explore new markets, products, and channels to increase their business performance and achieve growth. Thanks to artificial intelligence, machine learning, and other emerging technologies, the finance workforce will be freed up to focus more of their attention on developing additional skill sets to further enable the business. Finance organizations need to be on a constant lookout to assess the work that needs to be done and determine which skills requirements their finance workforce will need based on those needs.

It is, however, important to keep in mind that digital finance technology will not replace human employees. Such a digital transformation is meant to upskill the finance team, so as to better assist the organization. Such changes will allow for more time, energy, and resources to strengthen business planning, analytical capabilities, and performance reporting. After all, increased collaboration between finance and business is needed to integrate functional expertise.

As such, the future generation CFO team will be comprised of the following members:

• The Innovation and Investment Strategist will develop insights from external trends and identify changes in customer and competitor behavior. This will allow the strategist to design future business implications that can be converted into financial projections.
• The Financial and Regulatory Accountant has duties that go beyond traditional bookkeeping. And thanks to the various automated solutions, this role will become increasingly more efficient. One such fiscal and regulatory specialist will be tasked to ensure compliance and focus on delivering all core reporting. The accountant’s main responsibility, however, will be to present a realistic financial situation to the company.
• The Financial Planning Analyst will prepare all predictive analytics and real-time insights on all business situations, costs, and prices. All of this data will be supported with predictive modeling and scenario analysis. The financial planning analyst will have extensive business knowledge and in-depth FinTech expertise.
• The Finance Business Partner will need to have a strong understanding of all external markets to be able to analyze and understand existing threats and opportunities from the company’s strategic direction. They also need to have the ability to influence the business model and handle the interaction among different business groups. This is a key role in driving value and business performance. 
• The Financial Data Scientist will be in charge of executing complex financial models and will advise business leaders on the financial impacts on different scenarios.
• The Business Solutions Architect / Financial Automation Expert will need to be an expert in artificial intelligence and have extensive experience in emerging technologies. This role will have to be able to identify all required process changes and implement new business solutions by incorporating relevant finance technology.

The Future of Finance

Finance technology has already established a significant foothold in the industry. For the foreseeable future, some 82% of finance organizations plan to increase collaboration with FinTech companies. And once finance leaders have been successful in addressing the current finance function challenges, they will be in a far better position to create effective roadmaps that will indicate which technology upgrades to implement. As an increasing number of finance analytics and artificial intelligence tools are being enabled, the finance department will become increasingly tech-oriented, as well as a valued partner in the decision-making process.

Consero will provide your organization with a robust financial solution that will help you get a clearer picture and make more informed business decisions. Our history as a successful growth strategy development partner relies on its Finance as a Service (FaaS) software, aside from our in-depth understanding of finance, accounting, bookkeeping, market trends, and FP&A services. Feel free to contact our team and schedule a free demo. We’ll walk you through our processes, what you can expect as a Consero partner, and answer any questions you have.

 

The CFO (Chief Financial Officer) role has changed significantly over the past ten years. The traditional role of the chief financial officer included reporting, preparing for audits, controlling the treasury, compliance, overseeing finance teams, and supervising capital structure. Today, financial leaders still handle those traditional responsibilities, but the role has dramatically evolved to include additional duties (e.g., portfolio management, capital allocation, performance management, managing relations with investors, etc.).

Boards of directors and chief executive officers increasingly want their CFOs to be impressive communicators, while also helping with shaping the company’s strategy. Many business leaders often blur the line between operational and strategic financial management and leadership.

Strategic and operational financial leadership are two broad categories of the role of the CFO. But what are the differences between these categories, and how do you know which type of financial leadership you need in your organization?

What is Operational Financial Leadership (Operational CFO)?

An operational financial leader is a financial professional who is not just focused on crunching numbers, but develops a more holistic understanding of how the organization operates. Operational CFOs have a firmer grasp of what cash flow numbers actually mean because of their in-depth knowledge of your company systems and processes. Also, they have a strong grasp on accounting and financial reporting, operational risk, and other accounting functions. Such leadership skills can make a world of difference when it comes to the long-term success of the enterprise.

As someone who knows the business inside and out, operational CFOs know reasons why your service is performed or how and where your product is made, which provides them valuable insight into the company’s financial health. Furthermore, knowledge about company operations offers insight into all capital expenditures associated with a certain service or product.

For example, take a product that your company sells. In the past, your CFO could tell you the exact cost of producing each unit and how much profit you would make each time you sell a product. But an operational CFO is able to provide more context into what these numbers mean for your business. For example, they might look for expenses that could be reduced and check for inefficiencies in the way your product is produced. This is an added layer of financial analysis that will save your organization some money in the long run.

Operational financial leaders are involved with the organization’s IT function, working with the finance & accounting systems within the group. When making decisions on new technology or developing new software within the business, their sound operational intelligence and financial industry knowledge can provide valuable information and guidance. Their interest in innovation can also help with cost management. Operational CFOs continue to fill the gaps left by previously eliminated COO (Chief Operating Officer) roles. According to Crist Kolder Associates’ 2014 report, the percentage of S$P and Fortune 500 companies that had a COO had risen from 35% to 48% in just one year. Operations and finance go hand-in-hand for many businesses.

The CFO-COO can provide insights into both departments, thereby saving time and minimizing inconsistencies. They are expected to be able to make smart financial decisions related to key end-to-end processes, such as introducing new products into the market, order-to-cash, or quote-to-cash. The CFO-COO will have the right to access financial and operational data (without having to send a request or call the accountant) required for making the right business decisions. Therefore, a certain amount of time is saved and used for dealing with core issues.

What is Strategic Financial Leadership (Strategic CFO)?

Strategic CFOs are able to provide insights that can drive positive changes within the organization and create a comprehensive financial plan. They also understand the business’ financial operations, but their objectives are different from the operational CFO’s. When developing their strategies, a strategic CFO needs to be forward-thinking, while an operational CFO is concerned with past and present financial analysis.

A strategic CFO will work closely with the CEO (Chief Executive Officer), boards of directors, and other business leaders to develop goals for where the organization should be in the next 5 or 10 years, meaning that they play a crucial role in how you grow your business. The executives will then work together on finding ways to reach these goals. Strategic CFOs use financial and operations data collected from outside sources and internally to provide strategic value, bringing a competitive advantage to the company.

Recent research shows that CFOs are more likely to expand their reach into Human Resources than any other department. Talent management is an important factor in improving the finance function, but not many executives give their CFOs an opportunity to assist, not realizing that hiring is not solely the job of HR anymore. In the current market (as competitive as it is), it’s more important than ever for HR and finance management to work together in order to understand how their staff’s workplace experience impacts the company’s bottom line.

Strategic Financial Leaders are More Involved than Operational Leaders

Strategic leaders are typically involved in driving organizational change, which is why they are required to focus on multiple aspects of the business (rather just a single area). Such strategic thinking is often complex and involves understanding the delicate relationship between the organization and its environment. The roles of strategic and operational chief financial officer are quite different, although they do have some shared responsibilities.

An operational CFO can help you:

• Conduct long-term financial planning and analysis, as well as performance management
• Increase ROI
• Detect inefficient operations and advise on how to improve them
• Eliminate unnecessary spending
• Understand the operation functions of the business
• Understand the financial functioning of your business

A strategic CFO can help you:

• Understand the financial health of each segment within the organization and give strategic direction on how to move forward. They can also update financial performance data as technology and customers change, shifting directions if needed.
• Become involved with M&A (mergers and acquisitions) to advise on the most viable opportunities for sustainable growth and how to avoid potential pitfalls.
• Invest financial leadership and time in hiring the most suitable people to complement their finance teams.
• By advising on the best resource allocation strategies in order to maximize the value for the organization.
• By providing skillful communication, transparency, and integrity to their department and throughout the company.

Which Type of Financial Leadership Do You Need?

If you need an experienced and knowledgeable professional to help you assess your organization’s efficiency and make adjustments to save money and improve production, the operational CFO is the right choice. They can help if you need to deal with equity and debt or liquidity negotiations. Furthermore, an operational financial leader can provide valuable business intelligence that your company needs to mitigate various financial risks or deal with M&A.

On the other hand, if you need someone to provide stakeholders with assurance that your company’s finance is in expert hands, your company can benefit from a strategic CFO. A strategic CFO can help your company achieve the best terms, conditions, payment options, and credit lines with customers and suppliers. They can provide strategic leadership to help manage organizational changes, establish relationships with lending institutions and funding sources, and protect your company’s vital assets by assessing and managing financial risk.

With the level of trust that a strategic CFO instills, your stakeholders will want to invest more into the business, which will help attract new investors. That being said, finance departments have a huge opportunity to make a real difference by using information technology and accurate financial data.

How Consero Can Help

If you are looking for a CFO, you should pay attention to candidates with the right experience, cultural fit, leadership style, and communication skills. And more importantly, look for a candidate who understands (and embraces) your company vision and knows how to take your business there. Determining the CFO that’s right for your company depends on your objective, but a skillful outsourced CFO for support can bring the change your company needs to be able to thrive.

The advantages of hiring an operational or strategic CFO are clear. The level of insight and strategic guidance that CFOs provide to the business is where their value lies. But the challenge that many of them face is having their time regularly consumed by addressing the daily issues that the business faces.

At Consero, CFOs are empowered by taking the day-to-day operations of the finance and accounting off their plate. We can provide your CFOs with a platform of integrated cloud-based operational software, reliable back-office services, and customizable best-practice based processes. All that serves as a scalable operational foundation that delivers financial support to the finance professional, as well as the business, to gain a competitive advantage.

For more information on improving your financial management and finance function, feel free to contact Consero.

Hiring a CFO might seem redundant when your business is still in its infancy. But if your company has successfully navigated the start-up stage, is experiencing middle-market growth, or has even gone on to become an international business, bringing a CFO on board will be necessary. Unlike controllers, who are process-driven, project-focused, and historical thinking, CFOs can help with the complexities of your finances and the strategic planning you need to take your company to the next level. They have the knowledge and expertise that reaches beyond what your bookkeeper, accountant or controller can manage. At some point, professionalizing the finance function in your company by hiring a CFO will seem like the only logical next step.

Your company is ready to professionalize its finance function if you are wondering how to provide financial advice to your company’s principles, the efficacy of your financial analysis and reporting, managing risk, and creating financial tools, systems, and processes. By outsourcing a part-time CFO, you will be able to adapt their dedication to what your organization really needs – Finance as a Service (FaaS). Externally hired financial leaders used to be the least common type of CFOs, but their number has risen significantly compared to new CFO hires. They are most common in industries that experience frequent disruptions.

Differences between a Controller and CFO

Business owners and executives need to understand the difference between a CFO and a Controller if they think they need to add a CFO to their finance managing teams. The differences lie in:

• Project-Focused vs. Bigger Picture

A CFO has complete insight and a full view of the organization, which gives them a broad perspective of threats and opportunities that allows for their forward-thinking mindset. But your CFO can maintain such a perspective because the Controller provides accurate financial reports used to determine your organization’s previous successes. The accountant also participates in data analysis and audit projects, helping the CFO to stay focused on his or her broad perspective.

• Process-Driven vs. Project-Driven

Controllers are typically more structured and tend to follow the necessary processes that help them generate the information a CFO needs. Tasks like Managing the accumulation and consolidation of all financial data necessary for an accurate accounting of consolidated business results are typically handled by a controller. They also coordinate and prepare internal and external financial statements. The CFO focuses on planning and budgeting to maximize shareholder value, protect company investments, control costs, and project profits while the controller may help to support these more strategic tasks.

• Historical-thinking vs. Forward-thinking

When it comes to integrating with the board of directors, vice president, and other C-suite members to implement long-term, large-scale actions (e.g., capital investment, fundraising, capital structure, financial planning, and succession planning), CFOs play a vital role. Controllers also play a crucial role in those actions by providing reports that the CFO needs in order to evaluate current financial results and predict future ones. Also, they’ll take an important role in sales and payroll, while potentially helping with the audit process (both internal and external) and corporate development. CFOs know that they’re required to be catalysts for change and lead to transformation across the company, which can give the company enormous competitive advantage.

• Tactics vs. Strategy

Both tactics and strategy are essential to build and run a successful, growing company. In a small or family business, controllers usually focus on short-term, small, tactical actions that can improve current results. They are able to detect and correct inefficiencies that impact the short-term goals, but they rarely focus on the long-term outlook. On the other hand, CFOs use their experience, knowledge, and tactics to focus on financial planning and executing broad growth initiatives.

What a CFO Can Do for Your Organization that a Controller Can Not

CFOs can help set up a budget and forecasting function, as well as compare actual results with the forecast results to understand where, why, and how your company could be performing better. They can also perform strategic decisions so you can see the effects of a strategy being deployed (at each growth stage), determine the cash needs, track the performance of each strategic objective, and maximize the value of your organization.

To improve your company’s finances, as well as its financial visibility, a CFO knows how to create the best reporting package and KPI dashboard with the metrics that matter to your business. After following them up with your management team, you get an opportunity to become a metrics-driven organization.

Professionalizing your finance function also includes building trusted investor relations, and CFOs have the communication skills that can bring investor relations to the next level. They will accurately track your cash flows, optimize the ways you use it, and identify alternative funding sources. All these things cannot be done by your accounting team.

Business owners and executives need to balance attention to the organization’s past while making plans for future growth. In the world of finance, the back-office finance & accounting team along with the Controller are responsible for taking care of the company’s past, including balancing books and creating reports. On the other hand, CFO’s are concerned with the future – creating forecasts, strategies, and paving ways to achieve those future strategic objectives.

Both the controller and CFO roles are crucial to your organization’s success and they complement each other. Having the controller and CFO work well together as a managing team (having their expert eyes on the past and future) can bring immense benefits throughout the organization. Actually, companies that have a strong CFO presence can bring strong strategic insight and broader management experience by pairing their CFO with a senior finance executive (who manages traditional finance roles).

According to Korn Ferry (organizational consulting firm), at the 1,000 largest public companies in the U.S., the percentage of CFOs who are CPAs (certified public accountants) fell from 46% (2014) to 36% (2019). Nowadays, financial leaders are not just concerned with books but are increasingly in charge of enterprise risk management, information technology, and human resources. That’s also why organizations want more skilled and experienced and professional managers who are strategically savvy and have a grasp of the CFO’s finance operations.

Is It Time to Professionalize the Finance Function?

As you can see, reaping the benefits of an experienced CFO at an earlier stage is possible in startups, as well as in successful and mature enterprises. Profiles of today’s CFOs show how this role is evolving, and they raise key questions for the board of directors about talent and leadership development. But you must understand that the cost of professionalizing the finance function is always high when it is too late to do it (when you’re about to launch a key funding round or are in a crisis scenario). The following signs will help you know whether you are ready or even overdue for professionalizing your company’s finance function.

1. You are concerned about risk management

If you are unsure whether you have the right risk management strategy in place, it is time to hire a strategic financial leader. Most types of CFOs out there don’t know how to recognize the red flags that a trained CFO can easily see. This means that they may not realize that there are growing issues until it is too late to solve them with simple solutions. An experienced, full-time CFO can monitor your plans and strategy and provide timely advice and possible responses.

In case of a downturn, many leadership teams crumble under the pressure to make quick and effective decisions. It’s essential for CFOs to always be one step ahead of changing market dynamics, particularly when it comes to sensing a downturn or recession, responding, and leading the recovery.

2. Investors request more detailed information

Do your principal investors want more information than what you are giving them? They may want to review everything from your internal financial controls to essential KPIs like customer churn or ARR as they decide whether they should or shouldn’t invest in your organization. A CFO can make the entire process easier for you because he or she will know what potential investors want to see and how to prepare the right reports.

3. You’re experiencing difficulties with the audit process

As your company grows, third-party entities will require audited financial statements at some point. Conducting such audits means additional scrutiny of your organization’s finances, which can be intimidating and overwhelming (especially to business owners and executives who don’t specialize in finance). To make your audits cheaper and easier to manage, your CFO can create and monitor finance and accounting systems with internal controls. When it’s time to conduct an audit, a CFO can oversee it, allowing you to deal with your daily operations without stress.

4. You are growing rapidly

The CFO will ensure that the company has conducted thorough market research to support financial projections and assumptions. Today’s business environment is quickly changing and increasingly competitive, extending the role of CFO beyond finance. CFOs also need to be experts in market trends and know how to use customer data to identify new business opportunities and manage the risk associated with quick growth.

5. You want to simplify communication

If you have lots of consultants around you, communication with all these people can make things more complicated and difficult. They might not understand the position and work of other consultants, and you can lose direction if they are working autonomously. On the other hand, a CFO can consult with all the consultants and get them on the same page regarding your overall strategy. They will also report directly to the CFO.

For many years, finance was regarded as a function designed to support other business units, rather than an integral part of a company’s overall strategy and success. However, times have changed, finance functions are expanding and transforming to drive better business results, and professionalizing and modernizing the finance function in your company is critical to meet tomorrow’s challenges. Embracing new technologies (such as machine learning and artificial intelligence, big data analytics, and business process management driven by optimization and automation) and having a finance expert to drive the necessary changes has become imperative for companies that want a competitive advantage on the market. Among other roles, CFOs are typically focused on performance management, strategic leadership, and organizational transformation.

How Consero Can Help

If the capabilities of your finance department require more sophistication and expertise to support the anticipated growth, Consero can provide scalable teams, software, and processes to your business and manage the back-office transactions. Consero’s Finance as a Service (FaaS)  produces an optimized finance & accounting function including audit-friendly financials in a shorter timeline and lower cost than building in-house.

We can help to support your CFO and professionalize your company’s finance function, helping you optimize your finance operations and evolve in the face of ever-changing needs. Contact Consero today for more information.

 

Strong leadership plays a critical role in ensuring that organizations stay financially adaptable and are able to build resilience and sustainability in today’s fierce market. The importance of good leadership may seem obvious, but what is less obvious is what makes a good leader. The most effective leaders have a sophisticated and thorough understanding of their organization’s financial health, and they make decisions grounded in financial realities. Then, they are able to use that information in their communication to demonstrate the strategic connection between money and mission.

Leading CFOs (Chief Financial Officers) around the globe say that they need financial leadership to bring their finance teams to the next level in driving business performance. Management accountants and bookkeeping professionals say they need financial leadership to be able to advance their careers or the careers of their staff. In this article, we will explore what financial leadership means.

The Need for Financial Leadership in 2020

Who is better positioned inside an organization that the CFO to develop structure from complex processes, as well as create sustainable financial success in business? CFOs are financial leaders who take their financial knowledge and expertise and channel it into a role to create financial success for the enterprise and its stakeholders.

Financial leadership means that the Chief Financial Officer performs in a way that will bring a competitive advantage to the company (not only, but especially during times of financial crisis). From the advisory board to the business owner to the C-suite employees to the program staff – everyone has their own role to play in forecasting, budgeting, and analyzing for the long-term financial health of the company. However, the CFO is a confidant within or outside their company who can lend examples, perspectives, and advice.

Finance experts have a deep understanding of the banking relationships and business model, prepare detailed management and financial reports, work with business owners and the C-suite staff and board of directors and auditors, set policies around payroll and controls, and oversee tax planning, manage cash flows, and more. Their responsibilities include compliance issues, managing acquisitions, mergers, budgeting and forecasting, and creating a financial safety net for the business.

Typically, CFOs say that their finance function collaborates closely with risk management and compliance, operations, and internal audit (where finance presence is expected). Lately, many are starting to collaborate in areas where they could also make a big difference, such as HR.

With strong financial leadership, your company will be forward-thinking because you will have someone who is able to read the financial numbers and consider various issues (from economic to tax to industry obstacles). CFOs are particularly valuable for quickly growing organizations with complex product lines and a large number of employees. They provide financial leadership when forecasting performance, which is essential as an organization sets its sights on getting additional funding.

Transformation of the CFO Role

The value that finance leaders can bring to a company and the nature of the transformation of the CFO role is among recent insights collected from the CEOs that show how the relationship between the CEO and CFO is evolving. Today’s CFOs provide immense support to the CEO, advisory board of directors, and management team because they naturally bring a higher level of financial understanding. Such financial understanding serves as a lens to bringing difficult business decisions. The imperatives of any organization include clearly understanding the company’s vision through business insights (based on great financial understanding) and focusing on sharpening and articulating the corporate strategy.

What financial leadership brings to the table is fulfilling the need for balanced finance and business skills and capabilities.

Increasing Interest and Need for Analytics

Analytical insight is one of the most important emerging features in an organization’s financial leadership. The pressure on finance directors to provide valuable insight to support the company’s decision making is increasing. Organizations often say that one of the drivers for the finance transformation journey is moving the retained financial function away from the process delivery in order to better support the business in financial support and analysis. Nowadays, the finance function is seen as the function that correlates, regresses, extrapolates, and joins the data dots to drive further insights and help make data-informed business decisions.

Financial analytics is an essential area with which you can enhance your finance function. Financial analytics is important because:

• It helps in shaping up future business goals while allowing you to improve your decision-making, financial strategies, and provide a financial safety net.
• Every organization should have sound financial data for forecasting and planning to leverage the business.
•  Every organization needs timely and accurate information, as well as improved financial visibility across the entire organization.
• The needs for advancement in technology, the changing needs of the traditional financial department, and the emergence of new business models all lead to the need for financial analytics.
• It provides more in-depth insight into your enterprise’s financial health and improves the value, cash flows, and profitability of your business.
• Tax, bookkeeping, risk management, accounting functions, and other areas of financing are relying on large volumes of financial information that should be combined with analytics, so financial executives can interpret and leverage the data to run the business more effectively.

Over the last few years, organizations have opened their eyes to the value that finance can bring to them – well beyond the traditional role of providing standard financial reports at the end of each year. More and more CEOs are looking to CFOs and financial managers for actionable insight. Finance analytics arms finance executives leaders with the tools to make sense of a complex world of financial data. By combining external information (e.g., big data, demographics, and social media) with internal operational data and financial information, leaders can address critical questions with unprecedented accuracy, speed, and ease.

What Do Finance Leaders Need to Prepare for Their Expanding Roles?

In addition to their traditional responsibility, financial leader positions involve taking on various roles – part collaborator, part data scientist, and part strategic advisor. To become a financial executive, finance professionals need a certain set of skills to be prepared for this expanding role:

1. Technological aptitude

Technology and digital disruption are changing how companies operate but are also driving financial leaders to learn how to make the most of advanced technologies, such as predictive analytics, machine learning, and artificial intelligence. In reality, finance executives aren’t expected to delve into details from the tech aspect of IT, but they should have a good understanding of their enterprise’s tech infrastructure. What they need to know inside and out are the finance and accounting function tools because they must be able to find targeted, powerful metrics relevant to business operations. The CFO can no longer rely solely on finance skills.

2. Strategic planning

All of these demands require finance professionals to take a broader, expanded role in decision-making and developing financial strategies. They have become the architects of business value, which means that they must be forward-thinking and able to develop strategic plans.

3. Change management

With new technology and growing competition, most organizations today are in a state of flux. Finance leaders are now at the heart of change initiatives – helping to steer decision-making, guiding investments, and managing costs. That is why change management has become such an important skill for financial leadership, especially now with the recent economic downturn caused by the COVID-19 outbreak, because CFOs need a clear view of opportunities and challenges that arise from each change.

4. Collaboration

Strong collaboration skills are necessary for being a successful financial leader due to all these overlapping new roles and responsibilities. CFOs need to establish supportive and effective working relationships with the leaders of other company departments. Arranging job shadowing and holding interdepartmental meetings are some ways of promoting collaboration.

Many of the functions that work with finance are looking for why they need to move in a certain direction. Understanding what levels of communication a financial leader needs to get people through change is becoming more critical.

5. Understanding when to utilize outsourcing

Understanding the various options of outsourced finance and accounting, as well as when to use them, offers some great benefits to financial leaders. It is easier for a CFO to get valuable insights into business operations and handle critical, long-term, and daily tasks with a team of experienced professionals who handle the day-to-day transactions and provide exceptional service at a fixed price. Therefore, resorting to Finance-as-a-Service (FaaS) is the perfect solution that can help companies maintain scalability and financial stability to achieve success. Besides helping you improve your company’s financial visibility, increase efficiency and reduce fraud, bring cost savings, and help you execute with confidence, Consero also offers CFO services – a financial expert that will become a part of your team and help you focus on the strategic aspects of your business.

Finance Leaders as an Important Source of Information

When we think about how the finance function collaborates and fits with the rest of the enterprise, we must first recognize that it’s a trusted source of information. There is always that core role that financial leaders play in the organization, which is the place that the organization goes to measure the performance and get accurate data. But now more than ever, there is more emphasis on framing and communicating the information, as well as influencing it. With great visualization technologies, finance leaders and CFOs can drive a lot of great decision-making. However, they have to be proactive and not just wait for the CEO, investors or 3rd party institutions to seek answers.

We at Consero offer a wide range of financial support services to meet the unique needs of your staff and board at every stage. If you are ready to professionalize your finance function and develop financial growth for your organization, get in touch with Consero today.

 

In today’s shifting and highly globalized world economy, proper financial leadership and a well-organized finance function are proving extremely valuable to business longevity and success. The pace of change is rapid. Companies are growing into more complex entities, and CFOs (Chief Financial Officers) are finding themselves in more and more unfamiliar situations. Today’s CFOs want to increase effectiveness at taking the financial risks required to achieve long-term sustainable growth and meet the CEO’s expectations on financial performance.

Many CFOs today believe that a chunk of their time is improperly used. Great CFOs spend more time on analyzing and communicating value and less time on finance function activities. It is important that they become more customer-oriented, more closely involved with the business, apply financial leadership principles to time management, and build constructive relationships with the board of directors and CEO.

Take a look at our director’s guide to financial leadership to understand the CFO role and their key tasks to determine how a financial leader can help you transform your finance team and achieve maximum impact. This comprehensive guide for CFOs is filled with pragmatic insights on the state of financial leadership and future expectations.

The Expanding Role of the CFO

The role of the Chief Financial Officer may encompass a wide range of functions and responsibilities, which include the administration and management of financial, accounting, and internal control issues, in addition to acting as an external interface to the investors and different governmental agencies.

In a 2019 survey by CFO Research, about 90% of those surveyed said that their company’s CFO plays a vital role in talent development, technology strategy, performance management, and supporting operations. Most CFOs today are well-positioned to take more responsibilities and a broader role in managing company performance, and they are not content with mere reporting on business performance. They have the capacities to influence business outcomes and need a bigger role in providing data, insight, and guidance, implementing key initiatives, and shaping corporate financial strategy. CFOs need to be seen as a catalyst of change.

The role of the CFO is continuously examined because it is pivotal in driving transformation. The pace of change in the role is shockingly fast, and about 6 discrete roles are reporting to the CFO today. Those vary from Financial Planning & Analysis to Procurement and Risk Management, which tend to be quite finance-specific.

The nature of the CFO is cross-functional, which is why these financial leaders are playing a more proactive role when it comes to influencing change in the enterprise. What also influences the CFO is the pace of change of technology – according to McKinsey, more than 50% of the CFO functions are at the forefront of corporate digitization, whether it’s data visualization, robotic processes, analytics, and automation.

The CFO role was traditionally focused on financial transactions, compliance, and statutory and non-statutory reporting. But thanks to tech advances, the scope of their duties has increased, and CFOs can now access huge amounts of data on their company’s financial and operational performance. Armed with data analytics and the ability to read the numbers, CFOs can forecast performance, predict headwinds, and make data-based decisions across departments. Financial leaders can demonstrate their expanded role in several ways:

1. Develop talent and staff capabilities across the enterprise. CFOs have begun to extend their reach into the HR and increase their value through building talent. However, there’s still much room for growth. CFOs can develop top talent across the company, teach financial topics to non-finance C-suite executives, and build capabilities during transformations.
2. Head up transformations. In the finance function alone, CFOs tend to initiate the most transformations. However, non-finance executives are less likely to perceive them when it comes to making strategic contributions. To change those perceptions, CFOs can lead transformations across the whole enterprise, as well as communicate their strategic value by being included in setting high-level goals.
3. Leading the way towards automation and digitization. Few enterprises have initiated the shift towards automation and digitization in a substantial way, but the payoff is worth the effort. Companies that have gone through this type of change report modest-to-substantial ROI.

Non-finance professionals still believe that CFOs deliver the most value by dealing with traditional finance activities, while CFOs say that the most value they create is through strategic leadership. This shows that there’s a certain split that needs to be addressed to unleash the true potential of a modern CFO.

What Makes a Financial Leader?

Since CFO functions have developed (and continue to do so), it means that CFOs have had to supplement their skills to a new kind of finance leader to get the best out of them. These are some of the most important traits of a great CFO.

• Vision

Today’s CFOs have their eyes on the future and know how to instill their vision into their employees. That way, they ensure they always work towards solidifying the organization’s long-term vision and producing an ROI better than the company’s cost of capital. It is vital that financial planning is thorough, along with accurate budgets and forecasts, because the finance function is deeply embedded within the strategic efforts of an enterprise.

• Communication

For finance leaders, it is vital to be excellent communicators because they’re expected to help mold the company’s vision (not just to communicate within the finance department). This includes building a trusted and open relationship between the CFO and the organization’s stakeholders, then keeping them up-to-date with the financial health of the organization.

Also, CFOs should be equally comfortable when dealing with the marketing department as they are with sales. They immerse themselves in the operations of the enterprise, which allows them to understand the financial operations of the business, as well as how each particular department fits in with the organization as a whole and with the finance department.

• Confidence

Just like any other leader, the best CFOs are confident. They know how to inspire confidence in their employees and address problems in a confident way. CFOs don’t want their staff to be risk-averse, but they also don’t want them to be making unnecessary risks. It means that they should be able to instill confidence in their employees to guarantee they’re performing to the best of their abilities.

• Result-driven

Although most finance leaders are result-driven by default, they also understand the importance of the targets being achievable and measurable. CFOs should be apt at setting targets, as well as meeting them. That is what the board of directors expects, so it’s essential that CFOs have enough motivation to really lead the finance team towards those goals.

• Numerate

CFOs should be comfortable with numbers, know how to read them, and leverage important insights and proactive strategies from them. It is about how they can look at the vast amounts of data and pinpoint it to specific issues within the company.

• Tech-savvy

Artificial intelligence, data analytics, and big data (amongst others) are technologies that have hit the mainstream, and finance leaders have to know how to leverage them to keep their organizations competitive in the market. They stay on top of new technologies, recognize their importance, master their use, and oversee their integration. These new technologies produce valuable data that allow CFOs to improve their decision-making. CFOs must remain vigilant, especially with regard to cybersecurity, to know how to minimize the potential damage breaches may cause.

Financial vs. Strategic vs. Operational CFO

Financial CFO has a vital role in the overall function of the company. This is the most traditional type of CFO, and they are responsible for cost-benefit analysis, financial planning, managing risk, forecasting, and management of increasing acquisitions and government regulations. Armed with data, financial CFOs can leverage their knowledge and experience in analyzing and monitoring financial and non-financial data to identify new business opportunities.

The strategic CFO always works to provide insight and strategic value for the company based on collected data. They can understand the financial performance of each business sector and provide guidance on the best ways of moving forward. When it comes to mergers and acquisitions and government regulations, they can advise when to move forward, as well as when to say no. Strategic CFOs also deal with hiring the best people to meet the needs of their staff and provide transparency, integrity, and teaching mentality to the entire organization (not just the finance department).

Operational CFOs have a clear understanding of all company’s operations and finances. They typically work with the ERP, systems management, and IT function of the organization. Their operational intelligence and financial industry knowledge can provide key information when developing or making decisions on new technology within the business. For many companies, operations and finance go hand-in-hand, which is why many operational CFOs are filling the gap for COO (Chief Operating Officer) roles.

Top Priorities for CFOs in 2020

In 2020, finance leaders will focus on finance business strategy and structure; finance analytics; and finance technology optimization. The prime enterprise-level objective in 2020 will be growing the business, along with executing business transportation and improving operational excellence. These three key initiatives come as a result of the three most critical challenges finance leaders must overcome. Analyses and reports don’t contain enough forward-looking information, and the organization structure limits responsiveness to changing business needs, while tech investments have long payback periods for realizing their ROI.

1. Finance organization and technology strategy and structure

Companies’ expectations from finance are changing due to new service delivery models, matrixed decision making, and digitalization. Successful financial leaders know how and where to employ proactive strategies to take advantage of current industry trends, as well as how to structure finance to make the most of a limited annual budget. Progressive CFOs aim to provide coordinated support to the company, pay attention to reduce duplication of effort, and break down organizational structures that constrain the strengths of a digital finance function.

2. Finance analytics

Despite the drastic increase in the share of finance spent on analytics in recent years, just a few organizations have attained the level of maturity to implement advanced analytics capabilities. Current operating models prevent the effective utilization of advanced analytics resources, and it’s difficult to assess the ROI or impact of finance’s advanced analytics reports. Instead of making large-scale technology-led analytics investments, leaders should first consider pilots. When individual projects show success, financial leaders can pursue advanced analytics projects with confidence.

3. Finance technology optimization

Finance tech optimization is concerned with getting more value from ERP (enterprise resource planning) and accounting systems while adopting digital tech to improve efficiency, mitigate risks, and streamline finance processes. Finance technology implementations take too long because the technology literacy in finance is still in its infancy (which leads to an expensive dependence on consultants or an internal IT function). New technologies promise capabilities that can improve the ability of finance to deliver real-time, actionable business intelligence, and capture new process efficiencies. To capture the benefits of new technology, finance leaders should be able to identify their potential and justify the costs of new tech solutions.

Financial Leaders – Strengthening Creativity and Innovation

The need for creativity and innovation is a relatively recent revolution of the CFO’s role. They are now being asked to find innovative solutions to business issues, such as designing and delivering digital business models at a time when the need for proactive enterprise risk management and regulatory scrutiny is on the increase. For CFOs, achieving the right balance between risk and reward has become less distinct, yet more delicate, as they have become more involved in driving growth and financial strategy development.

Financial leaders also need to be more adaptable and imaginative in how they manage their careers. They need to identify, welcome, and leverage various perspectives from outside their function (across sectors and globally) to be able to take more calculated risks. Successful financial leaders question decisions and raise issues, and by doing so, they make their organizations profitable and productive. Raising questions can help senior executives think differently about the business and put themselves in the investors’ shoes.

Measuring the Strategic Effectiveness of Your CFO

Your CFO is a person in charge of your enterprise’s financial health, which makes him or her vitally important. Also, that’s why you need to measure their effectiveness to see how they add value to your organization, and how to tell if they’re helping it achieve and maintain financial success.

• Do you value your CFO’s input on key strategic decisions? Has their opinion had any influence on your business decisions?
• When it comes to forecasting, does your CFO engage with the managers, or do they communicate only with financial managers?
• Is the relationship of the CFO with your board of directors, investors, banks, and other business partners in good condition?
• Does your CFO analyze financial data based on business strategy or based on their personal fascinations?
• Will your CFO be confident to present to potential investors?

Does your CFO collaborate with the rest of your financial team, as well as with leadership teams, executives, and managers from other departments? To figure out whether your CFO is helping everything run smoothly, you should examine your whole operation – from management to supply chain to sales reps. According to The New CFO Financial Leadership Manual, 3rd Edition, written by Steven M. Bragg and published by Wiley Corporate F&A. The CFO needs to develop and follow a list of KPIs (key performance indicators) to track and key tasks to complete when first entering the position.

The CFO must be actively involved with top-level management and make substantial contributions to your organization’s growth and profits. Use these CFO financial metrics and ask these questions to determine if your CFO is performing as required.

Financial Leadership – A Look into the Future

Environmental changes continue to put pressure on business systems, societies are undergoing fundamental and rapid adjustments, and the global economy is in a state of uncertainty and volatility. At the same time, the global financial leadership profession is undergoing dramatic changes that are driven by both internal demands and wider pressures of the business world. To make sense of continuing turbulence and disruption, it’s essential that finance leaders are armed with the tools they need to navigate such landscapes. Understanding the drivers for change that are affecting the profession is also crucial to this. From there, it’s possible to recognize the opportunities and challenges facing the profession, business, and society.

Scenario planning can be a challenge, even in a stable economy, but in today’s environment (where new challenges are being added to the mix almost daily), how can a strategic CFO develop projections that accurately capture every element in the equation? They do it by relying on a combination of insights from big data, analytics, and scenario planning to explore their options, optimize performance, and visualize the impact of their decisions. According to a recent global survey of almost 400 CFOs, it was found that CFOs are confident about their forecasting capabilities, although they are worried about market volatility. They see scenario planning as essential to navigating uncertain and turbulent economic waters.

There’s a new opportunity to transform both the interpretative and operational elements of finance by using predictive analytics, data mining, and intelligent systems to exploit the data that companies are collecting. Furthermore, there are increasing expectations that financial function should play a greater role in business – in everything from the design of new revenue models to strategic decision-making.

In the future, financial teams and leaders will have to “flex different muscles.” Today, an increasing number of CEOs expect these teams to be the agents of change, and that trend will continue in the future. When entering the position, CFOs have to be inspirational, motivational, cross-functional, and they have to lead by example. These are all very different but interconnected leadership skills, meaning that charismatic financial leadership will be the requirement.

Consero and Finance-as-a-Service (FaaS)

When it comes to financial planning, finance analysts want to answer questions like:

• Where does my enterprise have the most opportunity for growth?
• What are the market trends in my industry, and how can we use it to our advantage?
• Where is my company not operating as cost-effectively as possible? How can we improve that?
• How has our organization traditionally performed financially, and why?

To answer these questions, Financial Planning and Analysis (FP&A) includes an in-depth financial analysis of an organization’s financial health and position in order to lay out an effective growth plan. Accurate data is necessary for CEOs and CFOs to make financially informed decisions regarding the company. To help you answer these questions, Consero will work with your internal finance teams to analyze all available data (both past and present) and look at your company’s ROI, cash flow statement, income statements, overall financial health, market trends, and more. But more importantly, we will help you develop forward looking KPI’s so you can know what the future looks like and what changes you can make to improve your performance.

We can help you guide your organization’s financial growth. We have a history of developing successful growth strategies, which is born out of a genuine desire to see your company grow, as well as from our expert understanding of accounting and finance, bookkeeping, capital budgeting, and market trends. With our FaaS (Finance-as-a-Service), enterprise-level finance & accounting software stack, and our customized, transparent approach to business growth, we take a few steps further from providing mere consulting services or basic back-office finance and accounting services.

Aside from this comprehensive guide for CFOs, you can also contact Consero to get more information on what you can expect from us as a business partner. We can answer any questions you may have, walk you through our processes, and schedule a free demo.

 

Many business owners and CEOs rely on their in-house finance and accounting team to process transactions and provide them with financial statements each month. That’s how things used to be done and it is what they are used to. But when it comes to managing your organization’s financial standing, traditional is not always most efficient and cost-effective. With recent technological advancements, Finance as a service (FaaS) is here to disrupt the finance and accounting landscape.

Finance as a service and in-house finance services offer different workflows when managing the finance and accounting for your business. It all depends on your business needs, but the enterprise-level software and controls along with the automation and cost-effectiveness that comes with a FaaS solution is oftentimes more beneficial to high-growth middle-market businesses, especially if they are investor-backed. When companies take institutional funding, the need for timely, accurate and advanced reporting requirements is accelerated.

Finance as a service Helps with Addressing New Challenges

CFOs and other financial leaders are being presented with new opportunities and facing new challenges at the same time. To be able to harness those opportunities and meet those challenges, finance must be effective, efficient, flexible, and integrated. However, there are internal issues that need to be overcome to allow this to happen. Finance executives and teams need to tackle those challenges to build an integrated, flexible, and modern finance function that meets compliance and back office responsibility, but also supports and serves the business.

The scope of today’s finance is expanded and it includes:

• Business support. Covering processes, activities, and people that aren’t mandatory, but support and add value to the business.
• Business services. Covering processes, activities, and people in support of ongoing business operations (including providing back office services).
• Compliance. Adjusting along with changing rules and regulations.

Once, finance’s only role was only concerned with reporting and compliance. Today, that has shifted to decision support, which includes pricing and investment strategy, interactive forecasting, evaluation of strategic initiatives, analysis of commercial alternatives, and data analytics.

The key areas that finance leaders focus on are enabling effective decision-making, maintaining a manageable cost structure, and adding value to the business overall. The ultimate measure of finance’s performance is its ability to support your business strategy.

Benefits of In-House vs. Finance as a service

Benefits of having an in-house finance department include:

• Having more day-to-day control over your company’s finances
• The ability to access your financial position at any given moment
• Always having someone available to help or provide information (when needed).
• Getting the quickest answers to any questions you have from someone who knows your business inside and out.
• The ability to meet specialized, specific, and unique finance and accounting needs.
• Multi-tasking – in-house finance means that the function can evolve and adapt to support the needs of a growing business.

Benefits of using Finance as a service include:

• Lower upfront investments – Since you are not building an in-house department or purchasing software, the initial cost and future cost-effectiveness will be less.
• Minimal space – No need to buy and install hardware or accounting software at the office.
• Flexibility – With financial programs and support that live online, you can access and manage your company’s financial affairs anytime from remote locations.
• Automatic updates – The FaaS services you use will always be up-to-date.
• Collaborative capacity. The ability to interact with your team and clients in an online space. This also brings the advantage of being able to collaborate to make a more efficient program.
• Improved insight through connected data – When financial data is collected, stored, and presented in a unified form via a centralized system, everyone can make sense of the current opportunities and challenges (not just CFOs or other finance experts).
• Improved financial visibility and a more complete picture – As your business grows and evolves, you should be able to see the dependencies and interactions of all business departments. With automation and data analytics, you’ll be able to see your business as a whole.

Internal Controls for FaaS vs. In-House Department

To make sure the flow of information into your accounting system is timely, accurate, and classified correctly, you need to establish proper internal controls. Also, that will provide a series of invaluable checks and balances to reduce the risk of fraud. For example, having a few employees handling books, the risk of fraud increases. The person reconciling the bank account might be the same person paying the bills, and since there is no separation of duties, they are in a position to steal your company’s funds and cover their tracks.

Without proper financial controls and policies to monitor and safeguards expenditure and revenue transactions, businesses are open to internal fraud, overpayments, and lost revenue. However, moving to a consolidated platform and removing the need for paper-based processes can expedite collections, improve reporting, and reduce the opportunities for fraud. When providing financial statements for the business, there is a separation of duties and there’s access to financial reports that allow you to review any information that might seem incongruent or discrepant.

Financial Reporting Performed FaaS vs. In-House Department

Finance and accounting functions along with financial reporting processes differ for each business, depending on industry considerations, number of monthly transactions, specific business needs, and other factors. In-house accountants and bookkeepers can create and deliver reports for your business, but you will have to make sure that they have the right expertise, skill sets, training, and education to provide accurate financial reports. Oftentimes, in-house finance team members have to multi-task – they have other responsibilities, such as Human Resources, that can take their focus and time away from accounting (which is their core duty). When that happens, financial reporting can suffer because recording invoices, data entry, and paying bills take priority. For a business owner or CEO, financial reports are critical to maintaining cash flow and helping make data-driven decisions that govern the business.

Finance as a service, on the other hand, can help alleviate meaningless, inaccurate, and late financial reporting. It allows you to choose exactly what you need for your business. Furthermore, FaaS can often make your finance team more effective by letting them focus on their core job descriptions.

Cost-Effectiveness of FaaS vs. In-House Department

For many SMBs (small and medium-sized businesses), cost-effectiveness is one of the biggest determining factors when choosing a finance service. An average annual salary of a full-time in-house bookkeeper is about $45,000, while a full-time accountant can make around $60,000. In other words, just these two employees will cost you more than $100,000 per year. On top of their salary, you will need to add 20% on top of it for additional costs, which include:

• Retirement plans
• Medical/benefits
• Payroll taxes
• Hiring costs – advertising for a vacant job position, interviews, testing, and training

Using a FaaS solution from outsourced companies, your organization won’t have to pay for overhead costs. Your only expense will be a monthly subscription for leveraging a skilled finance team and using the cloud-based finance software, which is significantly less than having to pay an accountant, bookkeeper and additional support.

With an integrated financial management solution, your team will be free to focus on core tasks and productive work instead of repetitive (and often tedious) administrative tasks. Connected and unified systems as well as financial data visualization will support critical performance metrics, key checkpoints, and segregation of duties to prevent internal fraud as well as unintended errors. And by significantly reducing duplicate entries and repetitive tasks, your team will be able handle higher transaction volumes in the same amount of time.

Finance Transformation

FaaS came as a result of the drive to develop more effective, efficient, and supportive operations. Every type of digital transformation initiative aims to achieve more with less, and FaaS requires an investment that can significantly improve the service and value of your business finances. This transformation extends beyond the mere transactional service and goes into technical and professional services, strategic planning, and commercial decision support.

When compared to an in-house finance department, outsourced financial services or FaaS can help improve financial visibility as well as drive greater understanding and awareness of the role finance can play, benchmarking, new technology, and developing services models. In fact, there is a real trend and inclination for finance to move from being finance as a function to become finance as a service.

Finance as a service gives you enterprise level control and financial visibility at a fraction of the time and cost required to setup and run an entire in-house finance department. Also, it helps you save money and you get management reporting that will paint a clear picture of how your company is performing financially. As one of the leaders in the FaaS industry, Consero can help you with your finance and accounting functions so you can achieve maximum success with minimal client time and remove barriers holding your business from going forward.

 

Deliverables include:

• Overall health assessment of your accounting and finance department
• Unbiased suggestions on improvements
• System optimization
• Consero proposal