Four Top Challenges CFOs’ faced during the pandemic
The outbreak of COVID-19 has brought immense turbulence to the market, leading to many sleepless nights for the CFOs. While confronting the challenges, CFOs have gained insights to get back the business. This blog focuses on the top CFO challenges during the pandemic.
Today, the key focus areas are creating value streams for the organization, synchronized alignment with Objectives & Key Results, and increased operational efficiency. Nearly two-thirds of CFOs do not expect demand to recover to pre-pandemic levels until Q1 2022. After two years of economic slowdown, driving transformational growth while keeping performance metrics up, cost metrics down, adapting to change, and complying with expanded regulations is a rather steep mountain to the summit.
The Top Four CFO challenges
1. Agility – Ensuring Resource Availability through Reallocations
The pandemic has demonstrated that companies are likely to struggle to recover from a crisis without a backup plan. Developing an alternative method and quickly reallocating resources to keep a business afloat is imperative. CFOs will have to strive to pivot processes and systems to anticipate accounting challenges. Recognizing outdated platforms, furthering innovation to come out of the crisis, and allocating funds for digitization could ensure that the engine of a business continues to stay alive.
2. Dealing with Disparate Systems– Digitization of Key Financial Functions
Processes and systems that need human intervention slow down a business. Such an unprecedented change has been one of the critical lessons that the pandemic has taught us. Often, departments are disconnected, and even essential communication has relied on technology over the last two years. A CFO who wants to stay on top of financial and regulatory functions can no more depend on Excel sheets and manual data entry. Collaborative software hosted on a secure cloud platform can save time and increase the accuracy of output.
3. Accurate and Auditable Data – Risk Mitigation and Management
A critical and all-important need for CFOs is accurate and auditable financial information. While rapid, efficient audit engagements aim, the pandemic has made it clear that CFOs should expect sudden roadblocks and diversions. CFOs are now wondering if this puts them and their organizations at risk of exposure to volatile financial scenarios.
A few risks that may need management include:
- Failure of Internal Controls
- Fraudulent Malpractices
- Supplier Disruptions and Customer Loss
- Virtual Attacks and Cyber Risks
- Lack of Success in Government Policy
- Valuation Dips and Associated Risks
4. A slowdown in Productivity – Drive Operational Efficiency
Digitization and virtual improvements aside, CFOs face the biggest challenge of ensuring that talent is adjusting to the changes in the face of the crisis. Ensuring a productive workforce that also reflects on the balance sheet warrants critical changes in operations such as:
- Moving to Scenario-based guides to revenue and cash flow forecasts
- Reduce expenditure on an enterprise-level through judicious outsourcing and real-estate shifts
- Amend procurement contracts and diversify supply chains to ensure best bargains on asset categories
- Restructure portfolio to ensure value creation and survival in the long term.
An agile CFO is likely to recognize the host of benefits that automation brings. To be a part of the future, finance departments have to boost resilience and agility. Although the recovery trajectory for the economic slump is still not clear, the time is now to act and ensure that critical financial functions that can bleed money are kept in check.
Despite challenges, we, DataTracks, strive for cost-effective and reliable reporting solutions for you. If you’re interested to know more about how you can save money for your organization, reach out to us at +44 20 3608 8035 or write a mail to email@example.com