The evolving responsibilities of finance in uncertain times

In my last article I started to look into the themes discussed at our recent virtual round-table on the future of Finance.Of the many interesting topics discussed, there was a recurring theme that kept rising to the surface – the important role that finance leaders play in providing clarity during uncertain times.

While the Finance function cannot be expected to have all the answers (what many of us would give for a crystal ball right about now), the CFO is increasingly being looked to in order to provide accurate and honest information about the state of the business. Communication – both inside the business, and to suppliers and supply chains – couldn’t be more important, and the CFO will play a key role in these stakeholder discussions.

But also, considering the CFO is one of the few with a vantage point across the whole business, Finance needs to be the one to make swift and informed decisions to guide the business through short term chaos, towards long-term survival. No easy feat in a situation where even the most thorough scenario planning could have prepared them.

Understanding the impacts of today, and the implications of tomorrow

Without doubt, current disruptions have presented CFOs and finance leaders with some difficult challenges and tough choices about what is best for the business, and the people within it. To understand the financial impacts today, as well as any knock-on implications of the future – from both a structural and a resource perspective.

As attendees of the round-table agreed, it could be six to 18 months before the true impact of today’s disruption is truly felt. For many, this is increasingly going to require businesses to be leaner and more flexible in their approach. A recent report from PWC backs this up, with 72% of CFOs saying that flexible working driven by the crisis will benefit their business in the long run.

Flexibility is needed across the business – to be able to adapt to changing environments and changing information. Most obviously, in terms of new ways of working, along with the ability to adapt operations and lines of businesses. But also, flexibility is needed with finance professionals themselves.

The broadening role of the CFO

The changing responsibilities of the CFO have been heralded for a while – to wear more than just their traditional ‘number crunching’ hat, and to develop as a strategist, consultant, and data expert.

Today, these requirements have been accelerated, with finance leaders needing to be able to span across multiple teams and cultures, and to rapidly develop partnerships where finance people need to become closely embedded with other departments, like marketing or supply chain or sales, for a greater understanding of their needs and how to react to them.

And, of course, having the flexibility to respond to customer needs. During the current crisis, customer behaviours are understandably changing – what is considered essential and non-essential now is different from four months ago and is likely to be different again in a few months’ time. This will mean making rapid judgements based on the past 3-4 weeks, but also some careful decision making needed for some of the unknowns of the future.

Ultimately, much of this falls on access to data, and the ability to analyse the information gleaned from it. Quality data is the essence of finance, and finance leaders need to be comfortable getting the data out themselves – not just to be able to make decisions based on accurate and holistic insight, but to be able to communicate a vision to the rest of the business.

Watch this webinar: Agile Finance: Reimagining and Reforming the Business from the AICPA & CIMA, Oracle and McKinsey on the critical steps CFOs and finance organisations can take to build financial resilience to deal with uncertainty and prepare to return the business back to scale quickly.