How to Win Over Your CFO With Next-Gen Financial Reporting

As a member of the FP&A team, one of your key objectives is to prepare accurate financial reports that produce actionable insights.

Realistically, however, there are multitudes of variables involved in the reporting process that make it extremely hard to prioritize the information presented.

As a result, a percentage of leadership decisions tend to miss the mark, impending progress in highly dynamic and competitive markets.

Here’s how you can leverage next-gen financial reporting software to improve the accuracy and effectiveness of your financial reports and win over your CFO.

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The urgent need for financial reporting software

Gone are the days when financial forecasts were based on the hunches of analysts and executives.

With terabytes of data generated from a wide range of business applications, financial reporting has evolved to require error-free and robust data processing. Trying to complete this process manually is neither possible nor desirable as inefficiencies can make the entire exercise redundant. 

With financial planning software, you can efficiently address the complex issues that affect the financial planning process.

Apart from saving time and resources, integrating FP&A platforms with your existing systems enhances the efficiency of decision-making processes across the organization. Read on to learn about the common challenges that CFOs face and how FP&A software like Pigment can address them effectively.

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How to address common challenges faced by CFOs

As a member of the finance team, it's important to understand the challenges your CFO is facing. If you want to help them effectively address these issues and build a successful relationship, read on to discover what you can do.

Pressures of Economic Downturn

The global economy is still reeling under the aftermath of the COVID-19 pandemic. The looming threat of recession has created new pressures for companies around the world. 

In light of this uncertainty, companies need to optimize the utilisation of their resources, and this is where the role of the CFO assumes even greater importance.

Some of the common challenges that CFOs must address in present times are:

• Extending cash runway: Companies need to control and cut costs, generate new revenue streams, and optimize cash collection efforts. Extending the cash runway would offer CFOs the much-needed room to manoeuvre through the crisis unscathed.
• Potential Layoffs: In a bid to cut down on costs, companies often opt for layoffs. This allows them to reduce expenditure and optimize their operations. But it must be ensured that layoffs do not impact the growth potential and morale of the business and its employees.
• Fundraising: One of the biggest challenges that CFOs face during an economic downturn is the drying up of capital. Fundraising becomes much harder and often catches management by surprise.
• Under the spotlight: During economic downturns, the finance department is always under the spotlight. The CFO in particular is expected to help the company emerge from the crisis with minimal damage.

As the most forward-looking team under the finance umbrella, the FP&A team is responsible for predicting  and addressing uncertainty. This can be solved with native scenario planning features.

Scenario planning allows you to improve forecasting accuracy by running multiple what-if scenarios in a single click. Advanced modelling features of the FP&A platform would allow you to create multiple models based on different variables, enhancing the accuracy of the decisions.

Time Taken to Draw Insights

In present times, data is power. If you can utilize data correctly, the planning and forecasting processes become much quicker and more accurate. But with huge volumes of data available from multiple sources, completing this process is easier said than done. CFOs face multiple challenges here:

• Lack of timely reports: Reports are available only at the end of a period. Data collection is not performed in real time. As a result, it is not possible to draw timely insights to address ongoing problems. 
• Backward Looking Data: Data collection, hygiene, and processing take a disproportionate amount of time. As a result, data lacks relevance and analysts lack time to focus on value-adding tasks.

An intuitive and user-friendly financial reporting platform helps collect and process data in real-time, prepare accurate reports, and draw meaningful insights. This allows CFOs to reduce time required to make policy-level decisions.

Keeping Up the Team Morale

In a slow economy, finance teams encounter several additional responsibilities that tend to be overwhelming and create a high-pressure, low-retention environment. The head of finance struggles with:

• High employee turnover: Finance professionals  insecure about their jobs are likely to leave the position and look for more stable opportunities elsewhere. 
• Mental health concerns: Stress at work and uncertainty about the future can have a severe effect on the mental health of FP&A teams, leading to low motivation, productivity, and career satisfaction.

Ongoing communication and collaboration hold the key here. As a finance leader, the CFO would benefit from integrating and encouraging interdepartmental and inter-team collaboration across the organization.

Ensuring High Efficiency

Many businesses still depend on manual intervention for routine tasks.

This not only leads to increased expenditure but also results in a slow down of entire processes; budget approvals, for example.

CFOs must therefore invest in suitable process automation tools to boost the efficiency of their FP&A teams. One of the best options here is to invest in the right infrastructure and tech stack. 

By leveraging the latest technology, CFOs can equip their finance teams with the tools needed to increase their efficiency.

For instance, a financial reporting platform like Pigment can automate numerous processes, shorten the duration of certain tasks, and guarantee higher accuracy in reports. If these changes are made collectively, they can have a meaningful impact on the fortunes of the company.

Evolving Role of the Finance Department

Finance departments are no longer just another component of a business. Financial teams, with their CFO at the lead, need to assume responsibility for the finance function. This involves becoming a strategic partner in the business, acting as an influential stakeholder and driving growth instead of just crunching numbers.

You must evolve into the role of an xP&A partner where you leverage the best practices from the FP&A processes and extend those practices to the entire enterprise. This includes practices like advanced analytics, ongoing planning, performance monitoring, and forecasting.

As the head of the finance department, the CFO must take the lead here and ensure a smooth transition from FP&A to xP&A through the integration of a robust platform like Pigment. A suitable FP&A platform will enable the finance teams to enhance their efficiencies and ensure cross-departmental collaboration.

No Longer a Data Gatekeeper

Traditionally, finance departments act as the data gatekeepers for the entire company.

Other departments requiring data usually send their request to the finance department. This process is fraught with inefficiencies and needs to be done away with as soon as possible. Integrated planning platforms emerge here as the facilitators of change. 

By creating a single source of truth and automating the data access process per the clearance level of individuals, financial reporting and planning platforms have ensured that all teams, including Finance, can access accurate data in real-time and make decisions that reflect the current market situation.

By implementing an integrated planning platform like Pigment, CFOs can breathe a sigh of relief and address their challenges through automation, data integration, and collaborative workspaces. This in turn relieves the FP&A team of  stress and menial labor, allowing them to focus more on core operations. 

In evolving industries, agility holds the key to success. Companies that are complacent or reluctant to change will likely fall behind their competition. 

Now is the time for advanced financial reporting, and FP&A platforms are leading the way.

By tapping into the full potential of your FP&A team, you can create impressive reports that will wow your CFO. By transforming finance from a business unit to a strategic partner, you and your FP&A team can guide your organization towards prosperity and a brighter future.

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