Finance professionals need to get out of their comfort zone to take center stage in front of the CEO, and perform as advisers rather than number crunchers
Over the past 30 years, the role of the CFO has gradually become key on executive boards. Now, automation and digitization are equipping you (and your fellow CFOs) with new tools. When the processing of numbers and delivery of reports become fully automated, you no longer need to spend up to 90% of your time on ensuring that the numbers are correct.
This paves the way for a whole new role; one for which many finance professionals are unprepared. It also means that the CEO and the other members of the management team can and should expect other qualities from the average CFO.
The CFO and Controller need to be advisers rather than merely deliverers of figures, and as finance professionals ourselves we would like to encourage this trend.
The new weekly schedule
According to the traditional weekly schedule, you work on the financial report on Monday, Tuesday, and Wednesday. On Thursday, you put the final touches to the report and send it out in the afternoon by email.
On Friday, you check whether anyone has done or noticed anything.
Begin the process again on Monday.
In the future, the week will look like this – (and it already does in some finance departments):
Monday: The report is ready at 8 am because everything is fully automated. You skim it and go to meetings with our stakeholders, ask questions and agree on the state of the business.
Tuesday: You brainstorm about how to improve the business, based on our insights.
Wednesday: You identify the best ideas and decide what to do.
Thursday: You implement the initiatives that boost the business.
Friday: You calculate how much money the new initiatives have earned for the business this week.
Into the spotlight
How do we as CFOs take center stage and present the report rather than throwing it in from the wings and letting those responsible for the business area decide what to do, based on the figures? It starts with digitization.
Digitization of the finance function enables speedy delivery of the figures to the entire group; in minutes and hours rather than days and weeks. In addition to the fact that the figures present a real-time picture, time is freed up for analysis and for advising the rest of management.
If we present a report with three-week-old figures, five minutes later, the people responsible for the business will be sitting discussing what they should do – without us.
If financial work is to make sense, we have to deliver fresh figures and we must evaluate the performance of the business.
We need to challenge this mindset: ‘You don't earn anything on these particular customers, so why are you holding onto them?’ Then, it is up to the people responsible for the business to decide whether to take action or whether there are other factors that make these customers worth keeping.
We must ask all departments to tell us more about the business and their strategy. This will allow us to get back to them the following month with recommendations.
Why is it not simply the job of the people responsible for the business to read the figures themselves and do something? Because their job is not to understand the figures; it is to generate business with customers. They do not have time to delve into the numbers, but we do. We need to point out when something looks wrong and there is potential for improvement. Then, the business people can do their job.
This will turn the finance department into a value-adding profit center; transforming it from a mere cost center with a mission to improve efficiency.
Why retraining is necessary
Progress requires effort. Many controllers feel more comfortable fine-tuning and removing errors from Excel spreadsheets than standing in front of senior management to present a report. The way forward is to start with baby steps. But if a tiny step simply means more tinkering with Excel, there will not be much progress.
The finance function must be more aware of its strengths.
We have been slaves to systems and processes. We have neglected the management role, but we need to assume it.
We need to be leaders rather than spreadsheet wizards.
The finance department is the only department in the organization that truly understands numbers. Therefore, it makes no sense that the company stops making use of this insight once the report has been delivered. We need to assume the role of adviser for the business and continuously apply our unique understanding.
There is no longer any excuse for putting off moving forward, because we have access to all kinds of systems for automation. This means that many finance professionals will have to think innovatively. There is still a need for eyes and hands to balance the figures, but many skillful CFOs and controllers need to be retrained to think more in terms of the future – to step out onto the stage and advise.
Learn more about one of the tools that will speed up the processing of numbers and enable you to deliver reports for the entire group within hours instead of days or even weeks.