The Major Challenges Heading Into 2023 — and How CFOs Will Meet Them

Updated: November 15, 2022

There’s a long list of challenges facing CFOs heading into 2023. These include, but certainly aren’t limited to, ongoing supply chain issues, rising interest rates and energy costs, persistent inflation and slowing economic growth. CFOs should be asking themselves what can they do now to prepare for these challenges?

Biggest Challenges Currently Facing CFOs

In a survey conducted by Gartner in July, more than half (54%) of CFOs said that hiring and retaining staff is the biggest challenge they will face over the next 12 months. This was followed by accurate forecasting (36%) and strategic cost cutting (35%).

Commenting on the survey results, Gartner Vice President Marko Hovart stated: “The top three challenges are a reflection of CFOs’ struggles to manage against a backdrop of persistent inflation and unusually high macroeconomic uncertainty. CFOs need to identify the few critical areas where investments should be accelerated, such as human capital and digital investments, while optimizing costs against a backdrop of stubbornly high inflation. This is no easy task.”

Raising compensation, of course, is one way to hold onto employees, but this strategy alone won’t solve the problem. Instead, companies should refine their employee value proposition to reflect the expectations that many employees have now from their employers, such as more flexible work hours for a better work-life balance. Companies should also reexamine their recruiting strategies to make sure they are leaving no stone unturned when to comes to finding the right employees to fill open positions.

Driving Growth by Using Technology

As the finance leaders of their organizations, it’s important for CFOs to understand how to drive growth in the face of rising operational costs. Potential strategies include identifying new customer segments and revenue streams, as well as new product and service lines that can help ignite growth. New partnerships and acquisitions, along with fresh new sales and marketing strategies, can help accomplish this.

Technology can also help CFOs meet these challenges. Hovart mentions robotic process automation (RPA), machine learning (ML) and natural language processing (NLP) as a few technologies being used in the finance function to increase speed, accuracy and auditability. “What’s important is the ability to translate these digital workflows back to traditional workflows and stakeholders to explain how these technologies interact and improve them,” he stated.

At the same time, CFOs must be able to find finance employees who are comfortable using technologies like these and also possess the needed finance experience. “Finding talent that is willing to constantly evolve while at the same time relate back to the traditional way of doing things is a difficult thing to do,” Hovart stated. Some candidates may have the technology skills, but not enough finance and accounting experience, while others will have the necessary finance and accounting experience but not enough tech savvy.

Improving Forecasting Accuracy

Tools for improving forecasting accuracy vary from one company to the next based on how digitally mature they are and certain prerequisites that must be met. The best way to improve forecasting accuracy is to make sure that the company’s operating and financial models are in alignment, so the correct drivers of business performance are captured and analyzed.

A variety of tools are available to help companies build better forecasting models for improved operational management. These include ERP export modules, relational databases (e.g., MySQL) and power visualization software (e.g., Power BI).

Hovart recommended focusing on the short term to allow for testing of assumptions, as well as establishing metrics that enable tracking progress against benchmarks. “Broadly speaking, a good framework would be for the CFO to break down the components of what exactly makes up ROI, cost, return and risk and see if the investment reduces cost, increases returns and/or reduces risk,” he stated.

In the current environment, however, there are many external factors that affect a company’s ability to control costs. This has led to a greater focus on maximizing return and reducing risk with, as Hovart put it, “the hands that CFOs are being dealt.”

Using FaaS to Meet CFO Challenges

One strategy CFOs can implement to meet these and other challenges heading into 2023 is to outsource their finance and accounting function by switching to Finance as a Service (FaaS). The FaaS model allows companies to quickly scale up the finance function, standardize reporting across portfolio companies and reduce costs.

With FaaS, CFOs can focus on more impactful business initiatives while reducing the cost and complexity of maintaining an in-house finance operation. Employees can reallocate their time from administrative finance functions to high-impact business development initiatives, while companies can reduce staffing and technology costs in the finance department.

FaaS also provides more control over finances than traditional accounting systems. This will enable finance employees to spend less time on administrative tasks by eliminating the need for manual data entry while eliminating work cycle delays with automated processes and workflows.

To learn more about the benefits of FaaS and Consero’s integrated finance and accounting platform, please contact us at https://conseroglobal.com/request-a-consultation/

Related Resources

consero_inhouse_vs_outsource_infographic
Case StudyCFO

How Consero helped BigCommerce grow from start-up to one of the year’s hottest IPOs

For the past nine years, BigCommerce relied on Consero’s Finance as a Service [FaaS] model and found that the tech-enabled service provider scaled up well ...
Back Office Holding Back 3
ArticlePrivate Equity Solutions

How private equity investors can get the most from their CFO

GPs may be eager to leverage the talents of portfolio company CFOs, but managing the tactical responsibilities of the finance department can interfere with the ...
Abstract finance and accounting visualization with a cloud and graphs
ArticleTalent

How to know you are working with a smart accountant

Being an accountant in the smart modern era of new technologies and automation is not an easy job. Accountants can quickly lose a job or ...
Case Study

How OK2Charge Scaled the Finance Function with Finance as a Service

During a recent Client & Cocktails webinar, Consero’s Director of Private Equity & Venture Capital, Tony Esposito, spoke with serial entrepreneur Eric Broughton about his ...
CFO
Private Equity

Why CFOs struggle to measure risk

Organizational change is a primary driver of growth in business, but it’s also considered among the riskiest propositions in the executive playbook. According to the ...
Private Equity

Achieving a Higher Standard for the Finance Function Amid COVID-19

The standards still apply COVID-19 might feel like a reason to suspend the usual priorities, but now more than ever, the finance function at portfolio ...

Finance as a Service

Cutting edge technology, processes, and people in a fully-managed solution to deliver precise financial visibility and improved operational scalability, plus a lower and more predictable cost structure. 

Flex Finance

Keep your existing technology and processes. We can manage the back-office F&A function from end-to-end process, including closing the books. When you need skilled talent, we can supplement your F&A team.

Advisory Services

Expert advice and strategies to help you grow.

• CFO Advisory Services
• FP&A and Reporting
• Technical Accounting & Clean-Up

Consero FaaS: Disrupting the Outdated Traditional F&A Model

Transformation
  • Cash to GAAP conversion
  • Clean-up work
  • Interim oversight & support
  • Accounting software Implementation

Build it Yourself Solution

  • CFO / Interim CFO
  • Consultants / VARs

Consero FaaS Solution

  • CFO / Interim CFO
  • or Consero Interim CFO
  • Consero Setup/Transformation
Ongoing F&A
  • Monthly financials
  • Daily accounting support
  • Management reporting
  • Integrate add-on acquisitions

Build it Yourself Solution

  • CFO
  • Controllers & Accounting Team
  • Enterprise Accounting Applications

Consero FaaS Solution

  • CFO
  • or Consero Fractional CFO
  • Consero FaaS Enterprise F&A Software and Services

New PE Platform Investment F&A Challenges

Founder Owned Company Accounting:
  • Existing accounting done on a cash/hybrid basis
  • Run on SMB accounting software and other disparate applications
  • Inability to produce auditable financials
  • Lack of know-how to develop projections & KPIs
  • No consistency/structure to customer contracts
  • Underqualified staff
  • Non-scalable manual processes
Carve-Out Accounting:
  • Required to move off parent company accounting applications in a timely fashion
  • Have to build an entire F&A team
  • No documented operational policies and procedures
To Optimized Finance & Accounting:
  • Monthly financials available in 5-10 business days
  • Audit and diligence ready support details
  • Integrated enterprise grade accounting software
  • Budget and forecast reporting
  • Business KPIs
  • Efficient & scalable processes for rolling in add-ons