CFO’s and their teams aim to standardise transactional processes, deploy efficient financial systems and deliver strong performance from cash management to regulatory compliance.
However, a CFO’s role doesn’t stop there. To turn their company into a successful one and to save their profile, they must focus on strategic financials. They need to provide forward-looking insight that enhances strategic planning and decision-making. They must also extend the capabilities of their financial performance management systems beyond core activities into new areas, automating more processes and driving productivity gains still higher.
This strategic comprehensive perspective which covers core financials and strategic financials is known as corporate financial management (CFM). As CFO’s focus on addressing their strategic and operational challenges, they will have to invest in CFM systems in order to meet their objectives.
This is where a further challenge emerges. Finance Executives must look for and use performance management systems that are: robust, flexible, integrated, rapidly deployable and cost effective.
During the downturn in the economy and the increasingly demanding environment a new set of key challenges for CFO’s has arrived. These include:
Inefficiencies in core financial operations
Finance Executives may be struggling with processes that might be considered core foundational or critical. The problem is that the handling of these processes is not efficient or effective. Some of the processes that may fall into this category include: procure to pay, contract to collection, and service to payment.
Problems may also occur in relation to cash flow management. For example, the accounts receivable process might be poorly designed, systems that should be automated are not, which may effect the organisations ability to collect cash.
Another problem is accounts receivable may not be synchronised with accounts payable.
Budgeting and planning processes may be inefficient as well. Some organisations find that budgeting and planning take too long, however companies often lack the systems necessary to accelerate the process and omit to ensure that it is consistent with their organisations strategy.
A final part of core financials is compliance. It is important to effectively comply with regulatory bodies such as Sarbox and IFRS for example.
Inability to rise to a strategic level and provide valuable insight
It is a challenge to rise to a strategic level within an organisation and this is the time where finance can provide advice and analysis that can truly differentiate a company and generate profitable growth.
To move finance to a more strategic role CFO’s will have to identify new areas where processes can be enhanced and automated and then over-see the task. For example, non-standard tasks such as recruitment to retirement may be ideal for process improvement. Moreover, finance organisations can increase their strategic value by extending excellence in financial management out to trading partners.
Finally, another challenge lies in avoiding systems that do not work well together, it is important to use systems that are well integrated with other applications in the financial management system.
These are the risks that CFO’s face as they contemplate investments in financial systems that will support them as they grow enhance core processes and seek to elevate their organisations to a strategic level. In summary, they need to select and deploy financial systems that are robust, flexible, integrated, rapidly deployable and cost effective if they are to meet their overriding objectives.
Performance management solutions can help overcome these issues as they monitor, measure, and manage businesses, where companies can link their corporate strategy to operational plans. In order to meet these challenges, find out what Performance Management Software can do for your business. Visit: www.infor.co.uk/solutions/performancemanagement
CFO’s and Finance executives have a number of different challenges and demands in order for their company to reach the next level of profitable growth. This article addresses these issues and provides examples of how to overcome these challenges. Article Source:http://www.articlesbase.com/software-articles/top-challenges-facing-chief-finance-officers-cfos-1560649.html