“Accept the challenges so that you can feel the exhilaration of victory,” said General George Patton. Looks like your peers are planning on being very exhilarated in the coming months.
Because there’s no shortage of challenges facing CFOs these days when it comes to running their finance departments.
And we’re not talking about some of the more-talked-about issues like healthcare reform or the economy.
The things that are consuming most of your peers’ time these days involve the day-to-day running of their finance shops, including how some larger strategic shifts will impact them.
A recent survey by the Institute of Management Accountants identified the biggest issues facing accounting and finance departments right now. The top four:
- Streamlining processes and improving productivity
- Running a global business efficiently
- Achieving real-time visibility across the organization, and
- Handling financial consolidation efficiently.
We’ll take a look at each of these challenges to offer strategies so you can turn them into victories for your finance department.
Challenge #1: Streamlining processes and improving productivity
Little surprise what’s behind the desire to streamline and boost productivity: reducing costs. And many CFOs consider this a career make-or-break issue. Which means it requires ongoing attention.
The good news is, many of your peers are making progress: Nearly 70% of CFOs say their finance departments’ productivity has risen up to (and sometimes more than) 10% in the last three years.
So how are they doing it? You may want to pay less attention to the “softer” strategies, like improving morale, and focus more on the three that are getting the job done for your peers: improving business processes, improving technology and hiring more skilled and knowledgeable staffers. (Proof that sometimes you have to invest a little more on the front end to see greater long-term payoffs.)
Challenge #2: Running a global business effectively
No denying, more companies are doing business internationally these days. An important growth strategy, for sure. But one that presents some unique challenges, especially for finance execs.
CFOs have to look at a whole host of issues, from supply chain management to different payment practices, depending on what part of the world you’re dealing with. Even little cultural differences can make a big difference in the success of your international ventures.
As your business looks to become a more global business, be sure to think about even those small issues which can impact the success of your efforts.
Challenge #3: Achieving real-time visibility across the organization
“Real-time” may have become a bit of a buzzword in recent years, but it’s still a priority for many finance departments. And an uphill battle, as well.
Ideally, the data you and other departments and execs are working from is up-to-the-moment accurate, reflecting exactly where you are at this instant in time.
But that’s not always possible. One of the biggest culprits: the way the data is being managed. Everyone knows relying on spreadsheets is far from a best practice. Doesn’t mean it isn’t happening … often.
Granted a fully automated, real-time system may not be in your immediate future. But you can try to prune away things that add extra steps — like duplication of data entry and spreadsheet reliance – which take you further away from real-time info.
Challenge #4: Handling financial consolidation efficiently
That last challenge has a direct link to the final one: financial consolidation.
Of course, the need to consolidate can happen for many reasons, whether you’re simply trying to centralize or your company has recently acquired or merged with another business.
What’s critical no matter why you’re consolidating: that the data you’re working from is clean.
If the information you’re joining is unreliable or inaccurate, not only will you have to contend with the upheaval any change brings, but you’ll have the added stress of relying on bad data.
That’s worth making a top priority when any consolidation is coming to help ensure greater victories.
