Marko Horvat, Vice President, of research in the Gartner Finance Practice said, “What we hear broadly from CFOs is that digital initiatives aren’t meeting their expectations. Unless CFOs reassess how they and their teams lead digital initiatives, those initiatives will continue to disappoint.”
As we continue to make advancements in digitalization and artificial intelligence in the field of accounting and finance, this becomes more relevant. While more and more accounting firms and leaders think about innovating through digitalization in their practice, they need to delve deeper and understand what is it that makes a difference.
Gartner, in 2023, surveyed 185 CFOs where it was found that improving finance metrics, insights, and storytelling can change management efforts and help optimize costs. The survey also found that over 70% of the CFOs considered these aspects to be critical to their success.
Today CFOs constantly strive to integrate artificial intelligence and automation into their financial practices. The shift to formulating new strategies through these new-age tools isn’t limited to just embracing new tech and using data. It aims to remodel the financial landscape altogether.
For CFOs, it has become all the more important to lay focus on other trends, beyond artificial intelligence. In this article, Finsmart Accounting – globally trusted for outsourced bookkeeping services in India – will share the list of top finance trends for CFOs to look out for in 2024. Let’s start!
– Talent hiring and retention
The talent shortage has been a consistent problem, especially in the aftermath of the pandemic. While it has worried all industries, accounting firms have been suffering immensely. Finding resources who are skilled in the niche field and retaining them has led CFOs and other accounting leaders to sleepless nights. While a lot of the factors contributing to this problem are beyond the control of the leaders, new hiring and retention tactics have become the need of the hour.
It has become immensely important for CFOs to address and get rid of unconscious bias in the workplace. Inclusion and diversity are other aspects that leaders need to dig deep into. Creating a welcoming and supportive environment, giving growth opportunities, and encouraging the workforce to do more than what their job descriptions say, are of utmost significance.
Another problem that accounting firms have to deal with is the need for a workspace that is safe for mental health. Working around issues like an 80-hour work week during the busy seasons, for example, is imperative. It is also essential to inculcate a culture of respecting others and creating a safe space for everyone. There is a reasonable number of qualified candidates, but the modern-day workforce always looks beyond what meets the eye.
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– Sustainable planning and reporting
The world has become more environmentally conscious. Gone are the days when you could use hundreds of piles of paper and nobody would complain. CFOs need to be extra mindful of maintaining transparency with investors and consumers. Sustainable reporting, and promoting responsible business practices are what businesses are expected to cater to.
As a CFO, if your business isn’t ESG-friendly, it is important to learn to curate financial strategies that help build reports, and governance structures and develop effective actions. Analyzing non-financial data like workplace safety, carbon footprint, and adhering to community guidelines is non-compromisable. Incorporating ESG principles into your business allows you to demonstrate your progress in improving the company’s reputation with customers, employees, regulators, and shareholders. Transparent sustainable reporting ensures compliance and builds trust with stakeholders. A major CFO trend if you ask us!
– Strategic allocation of capital
At an age where market volatility is at its peak, for CFOs, it is essential to allocate capital strategically. The age of free or low-cost money no longer serves the purpose. Investment in technology, resources, and infrastructure is essential. Especially, during times when there is an increased change in the working model (remote and hybrid roles), introduction of automation, and artificial intelligence, there is no space to not invest capital strategically. As CFOs look at the cost of capital investment and seek to understand if the business is at par with the ROI, capital allocation becomes imperative.
The decision-making process around investments has become more rigorous. Marketing is, yet, another aspect that modern-day CFOs need to focus on. Gone are the days when word-of-mouth could solve the purpose of business. Networking and building a client base happens through social media, public events, etc, which can’t happen without the allocation of budget. This approach is key to sustaining growth and profitability in competitive markets.
Read on to discover more financial trends for CFOs in 2024 or check out this blog to learn everything about auditing in accounting.
– A Shift to Real-time, Data-driven Insights
Artificial intelligence and automation are being adopted across the accounting and finance industry at a rapid pace. But the question here is, while CFOs and other accounting firm leaders continue to believe that it is for the benefit of the business, how do you exactly measure the benefit? In the current day and age, making abstract decisions can prove detrimental to a business. To maximize value and understand what is it that the business needs, data becomes key. Also, there is a vast amount of data available. For CFOs and accounting professionals, it can get tough to make the right use of the data.
Businesses are changing; month-end or quarterly reports aren’t enough anymore. This is where CFOs are in dire need of real-time data analytics. It helps them get insights into their finances, keep an eye on future trends, and analyze where the business stands. Internal stakeholders and investors look for information on a real-time basis and hence, the data available should also be real-time. The traditional methods are outdated and business processes need to change accordingly due to the current state of the global economy. This is what this CFO trend dictates!
– Strengthened relationships at both ground level and C-suite
The outlook of modern accounting and finance businesses has changed. It is critical to developing bridges across the organization – right from the entry level to the C-suite. Encouraging cross-functional collaboration can benefit CFOs in specific and businesses in general in a defensive economic situation. The CFOs are responsible for determining where to prioritize investments and where to cut back and that requires high-end collaboration. Expanding traditional CEO-CFO and CFO-accountants relationships is necessary.
While working with leaders helps CFOs align strategies as per global business standards, having a close relationship with accountants and other teammates helps them understand the real business challenges. This collaborative approach helps CFOs dive deeper into different aspects of business operations – marketing, and cybersecurity and understand overall financial and operational performances.
CFOs also need to have a better understanding of the spending, conversion rates, and lead generation progress and help determine new measures that the businesses need to adopt.
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– Strategic Partnerships and Outsourcing
An accounting firm or any other business operating in finance has several tasks and activities. Cost reduction continues to remain relevant in 2024 and using cutting-edge technology is pivotal. Especially, in the post-pandemic era, outsourcing remains a critical aspect of business. Such partnerships allow businesses to access resources without requiring extensive in-house recruitment. Outsourcing gives a balanced approach to managing costs and accessing solutions that are critical to businesses. Outsourcing non-core functions has helped strengthen businesses in 2024. Agile partnerships beyond cost considerations help motivate operational efficiency and reduce costs.
Outsourcing isn’t just about getting extra help for your tasks. It is a new business model that helps organizations grow. Besides driving innovation and transformation, outsourcing also helps get access to specialized talent on a global scale. A crucial finance trend for CFOs if you ask us!
Finance Trends for CFOs: Endnotes
CFOs are essential for managing an ever-expanding array of businesses. They need to set the trend that can help shape businesses for a better future. The finance and accounting landscape is challenging; the narrative needs to be built every day. And that is the beauty of this niche field. An incredibly important aspect of every business, it is on the CFOs to become resilient and be the strategic architect.
Outsourcing in the current setup is a boon for CFOs, equipping them with the means and resources needed to succeed. To know how Finsmart Accounting helps CFOs, write to us at connect@finsmartaccounting.com.
Also, don’t forget to check out:
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Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
