As the company’s financial leader, your job is to provide accurate and timely reporting on financial performance to support sound business decision-making.
The role of the CFO has changed dramatically over time as companies have evolved from manufacturing firms with simple cash needs into global enterprises with complex capital structures and more sophisticated financing, investment, and hedging needs.
Read on to explore some of the most common issues faced by today’s CFOs and how they can be overcome.
1. Failure to Plan Ahead
One of the biggest mistakes that CFOs make is failing to plan for issues before they hit. If interest rates go up or other economic indicators deteriorate, risk exposure will ultimately affect cash flow. In order to prevent this, financial leaders can take a proactive approach and set aside money for future interest payments, which will then be allocated at the time of payment.
2. Not Enough Resources to Handle Current and Future Needs
As companies grow and change, it becomes increasingly difficult to find the right talent. Fewer people are available to work on finance-related roles while finance departments are still expected to produce the same results. It is essential for CFOs to take a proactive approach and explore ways to utilize technology to keep up with requirements.
3. Insufficient Data to Provide a Clear Picture of the Business
In order to make informed decisions, financial leaders need access to accurate and timely information. However, many executives have reported that they have lacked complete and comparable reports across departments due to having too little time or resources. As a result, CFOs should ensure that key employees are working together and that communication is clear and open.
4. Failure to Execute Existing Plans and Strategies
CFOs need to be aware of the big picture and not get caught up in the day-to-day operations, but it is important for them to also focus on more pressing issues such as operating costs, labor costs, capital expenditures, and compliance.
By staying ahead of the curve and working closely with leadership, CFOs can keep their businesses successful and thriving.