As the chief financial officer of a top-notch business, you're under the pump; everything from budgeting to tax returns and financial planning is your responsibility. Financial work might feel less glamorous than front-end departments – but without a competent CFO at the helm, businesses can quickly fall apart.
It's easy to get overwhelmed by this reality, but setting the right goals can help you stay afloat. Let's approach the New Year with a sense of purpose, and use our knowledge to set achievable goals that will keep us on track throughout the year.
Here's our list of highly effective goals for CFOs in 2023:
Digitize and automate operations
The push toward automation isn't a new goal; in fact, it's been on the radar for several years now as the benefits make themselves known. For instance:
- Process automation could save up to 20 percent of a CEO's manual time
- With current technology, 80 percent of finance processes can be automated
- Robotic process automation has been shown to cut business costs by 25-40 percent
CFOs are rapidly incorporating automation into their financial strategies to make the most of these, and many other, benefits. There are plenty of processes that can be automated – for example, most companies have already digitized their invoicing and payroll processes.
But automation extends well beyond payroll. What if you could completely automate reporting and data representation, for instance? Being able to see the company's financial progress and projections at the click of a button can save time, boost accuracy and provide useful data for decision-making.
And that's only the beginning.
The modern CFO tech stack grows more sophisticated with each year that passes. A must-have for any CFO is a workflow automation platform that can handle tasks such as approvals, notifications, and document management.
These platforms can be integrated with existing systems like ERP software to streamline processes. All actions related to finance are tracked in real-time, allowing for more accurate financial visibility. Automation also allows for the rapid processing of timesheets and invoices – making sure no payments get missed or delayed from human error.
Are you still using the same dusty spreadsheets for what-if analysis? There are more than a few problems with this approach. It's frustratingly non-intuitive, can't be scaled to keep up with an expanding team, and causes far more headaches than it's worth.
Thankfully, this is another area you can automate with tools like ours. Pigment and other similar platforms are designed to make the scenario analysis process completely scalable; everything is intuitively organized to save hours of manual work.
As a CFO, the tasks you complete on a day-to-day basis can be split into two categories: those that add value, and those that don't.
The latter, unfortunately, take up a lot of your time. Manual data entry and processing are essential, but they're also extremely time-consuming – even more so when you factor in the potential for human errors. It's why so many CFOs have been turning to automation solutions to free up bandwidth and optimize their workflow.
Automation eliminates the need for manual data entry and processing, allowing CFOs to focus on more strategic tasks that add value to their organization. Automated solutions can also help improve accuracy by analyzing large sets of data quickly and accurately, meaning you'll have access to reporting and forecasting right away.
Decrease turnover and improve recruiting processes
The average turnover rate in the US is growing more concerning by the day. Gartner predicts that the 2022 average will jump by 20 percent, from 31.9 million to 37.4 million – and that's just the voluntary departures.
As a CFO heading into 2023, be aware that the employees of our post-pandemic era have an entirely new set of standards. They're not afraid to job-hop and demand more from their workplaces. Considering that an employee's loss can cost almost double their salary, it's in your best interests to retain them.
In working toward this goal, you'll be focusing on a few key strategies.
Nurturing your existing employees
Did you know that turnover costs around 33% of an employee's salary? That's an enormous expense for any organization. With this in mind, it's clear that the most cost-effective way to retain employees is to invest in them from day one.
Your goal should be to ensure every employee feels valued and appreciated for their contributions. This means offering competitive salaries and benefits, but also providing development opportunities such as mentorship programs or tuition reimbursement plans.
You can further show your appreciation by implementing flexible work arrangements – like remote working options – and offering generous vacation policies. These are just a few of the many ways you can make sure your employees feel secure in their positions at your company.
Addressing burnout and mental health
Mental well-being is absolutely critical to FPA teams’ productivity. An overworked, burnt-out team is more likely to make costly mistakes that can affect the bottom line. They're also going to be considerably less efficient than their well-rested and engaged counterparts.
Knowledge is the best weapon against burnout. Make it your priority in the New Year to equip your team with the tools they need to be optimally efficient. More importantly, make it an open conversation; too many employees fear speaking up about their struggles, so it's important to make your team feel comfortable addressing these issues.
Once you have the tools and conversations in place, set concrete goals for reducing burnout-related turnover. It could be as simple as reducing hours worked per week or providing more mental health days per year. However you decide to do it, make sure that your team has the time and resources they need to stay healthy and productive.
Create a distinct culture
The term 'company culture' is overused and underappreciated. Companies that solidify their culture from the beginning are giving themselves an enormous advantage:
- They have a distinct set of advantages in recruitment: they can attract talent that is more closely aligned with their values, making them better suited to the organization.
- They are able to create an environment where employees feel like they belong – which ultimately leads to greater engagement and efficiency.
According to SHRM, company culture is the number one deciding factor when employees are considering whether or not to stay with their employers. Foster a strong sense of culture within your team by setting clear expectations and values, and by rewarding employees who embody those values.
Identify and mitigate financial risk
If the past few years have taught us anything, it's that we can't predict explosive world events – but we can still make an effort to be as prepared as possible. As a CFO, that means keeping an eye on financial risk and having a plan in place to tackle it when needed.
It's important to identify all potential risks and create strategies for mitigating them. Here are some key areas you should be focusing on:
- Analyze the company's current liquidity position and stress test scenarios in order to prepare for anything
- Create a portfolio of investments that can help balance risk
- Stay on top of regulatory changes and how they affect the company
- Monitor external factors like commodities, currency exchange rates, etc.
Data visualization will be your best friend when it comes to tackling risk mitigation. With all of the facts displayed clearly in front of you – and in real time – you'll be able to make sound decisions more quickly and confidently.
Check out our use cases for Finance Teams and CFOs here.
Be the catalyst of transformation
Let's not sugar-coat the fact that we are experiencing a time of extreme market downturn. The role of CFO is a highly valued one, since the decisions you make directly influence whether your organization will sink or swim. As such, we're beginning to see an FP&A transformation.
In other words – the role of CFO is evolving, and those who are able to embrace this transformation and lead the charge will be successful in their roles. Start thinking of yourself as a catalyst for change.
The outdated CFO role
In the past (and for some CFOs, in the present day) the role of chief financial officer was limited to tracking and reporting on financial performance. You had technical and fiduciary expertise with a narrow financial focus, responsible for:
- Management reporting
- Controllership and compliance
- Investor relations
Despite being called a 'chief,' your leadership was limited to instruction and guidance. But it's time to step away from the traditional CFO role and into a more progressive one, where you can have a real impact on the business.
The new CFO role
In the New Year, begin to view yourself and your team as business partners with a strategic and operational focus. Elevate the finance team's purview from reporting and number-crunching to strategically influencing decisions.
For instance, you have a wealth of financial data at your fingertips that can tell a fascinating story about the health of the organization. Use this data to provide insights and recommendations on how to improve operations, cut costs, optimize investments, and more. Challenge the way things have always been done.
If you can use your knowledge to link strategic objectives with the financial goal of your business, you can become the catalyst for transformation and reclaim the future.
Introduce a culture of strategic business partnerships
As you move into the year ahead, it is crucial that you address any siloing issues that exist across departments. Silos are now understood by most organizations to be a significant inhibitor of performance and employee engagement.
- If each department is setting and working toward goals in isolation, you miss the opportunity to collaborate and maximize potential.
- Silos can create a competitive environment that distracts from overall objectives; you may face data integrity and accuracy issues as a result.
- The lack of cross-functional communication between departments can lead to missed opportunities for innovation and growth. Departments spin their wheels unnecessarily and resources are wasted.
To bridge the gaps and create a culture of collaboration, you need to set goals that are aligned across departments. How? By fostering finance business partnerships across departments, and introducing the concept of shared goals.
Your first step can be to partner with the CEO, COO, and other department heads. Make it standard practice to be in the loop on their initiatives, and offer insights from a financial perspective.
But it isn't enough to make yourself a strategic partner; your team needs to collaborate with other departments as well.
Be intentional about organizing cross-functional meetings and assigning joint projects. Ensure that your team members are regularly communicating with their counterparts in other departments to get the full picture of the organization’s objectives.
This is the year of uncertainty: are you fully prepped to tackle it?
We've covered the main goals that CFOs should focus on in the coming year, but there are plenty of other areas to consider. Perhaps you want to review your company's performance metrics and focus on driving better sales forecasts.
At the crux of your desire to grow and succeed should be the understanding that, fundamentally, your role as CFO is evolving. You are no longer solely responsible for financial reporting, but rather charged with driving the business forward in a meaningful way.
To achieve that goal, you need to become an active participant in developing and setting goals. That means taking a proactive approach to building strategies and tactics that will help your team reach its objectives and contribute to the company's success.
To recap, here are our recommended goals for the year ahead:
- Digitize and automate operations,
- Decrease turnover and improve recruiting processes,
- Identify and mitigate financial risk,
- Be the catalyst of transformation, and
- Introduce a culture of strategic business partnerships.
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