By Neil Robertson, CEO, Compleat Software
Digital technologies have dramatically changed how we access, store and share information. Transparency is the new name of the game. Rather than lock valuable data in folders and inboxes, business leaders can open it up company-wide and empower their colleagues with inter-departmental knowledge.
Some managers are better at this than others. Many CFOs, for example, have an inbuilt, and entirely appropriate wariness: the responsibility for the company’s finances can weigh heavily on their shoulders, so they may prefer to keep financial data close to their chest. This often alienates, and frustrates, other board members, straining important working relationships. The problem often stems from technological advancements in the workplace, such as automation and artificial intelligence (AI), triggering insecurities. Instead of embracing how certain software can make their jobs easier, CFOs view it as a threat.
However, it’s paramount for the business that CFOs and FDs maintain a solid working relationship with the board, the stakeholders – and with the rest of the finance team. Key to this is communicating important information in a timely fashion. New technologies can make it easier to share knowledge and keep the business moving forward. CFOs should harness this power and play it to their advantage.
Connect and communicate
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
A company’s financial parameters are not set in stone. Business plans, primarily based on projected revenues and cash headroom, often change. In response, CFOs will typically hedge against a reduction in revenue, build greater cash reserves and adopt a prudent position to spending.
When various departments are affected by a shift in conditions, they need to know before the fact. Tightening the purse strings may be best for the business as a whole, but this usually entails cutting investment. When all financial decisions are made in isolation, department heads could suddenly find their budgets frozen. They could be mid-project, embarking on a recruitment drive or even signing the lease on a new office. All that hard work shelved for an indefinite time without any warning doesn’t foster much goodwill towards the financial team.
The board’s consternation is often compounded by the CFO’s inability (or unwillingness) to provide accurate, timely and relevant financial information on suppliers, budgets and projects. Without this knowledge, stakeholders and department heads struggle to delegate budget spend and assign responsibility and accountability.
Automated financial technology can change that. It can enable all board members to see every aspect of their supplier contracts, review every request to buy, every order commitment and know exactly where they stand on both corporate and project related budgets, 24×7. They’ll be able to track the status of their corporate budgets and cash flow without delay and check budget spend in real-time.
The quality of board level relationships is directly related to the willingness and ability of the CFO to clearly communicate the financial parameters in good time. This can be challenging in times of stress; CFOs often have to respond quickly when things do not go as expected. They also need to remain diligent and keep the business on track. The right technology can help them stay in control of the bigger financial picture – while also communicating critical information to all stakeholders in time for them to provide input and adjust their plans.
Trust and technology
Information is valuable currency, and sharing it can empower people to their advantage. When information is made available, teams know what they’re doing and why – this means they are far more able to get the job done well. And when the results are good, it makes the business leader in charge look good too.
Unfortunately, many CFOs and FDs limit the amount of information they share. They prefer to take a measured approach to projected revenues and anticipated business spend, and are unwilling to fully delegate financial responsibility and accountability to their colleagues. Simply put, they often don’t trust their fellow board members to stay within the set financial parameters.
This lack of confidence is simply a reflection of the archaic accounting processes that still exist in most organisations. Many businesses still rely on manually approved paper invoice trails and outdated management reports. And yet, about 75 percent of these old-fashioned processes add no real value to the business at all. What good is a 15-day old financial report? CFOs need real-time information to make agile decisions in the best interests of the entire company.
The perception that ‘real-time’ financial management is expensive is as archaic as a Commodore 64. The right technology liberates information and enables a far more transparent way of managing finances, and full transparency can promote greater trust between colleagues. For a more collaborative working environment, CFOs need to trust in their employees and other high-level colleagues, and they need that trust to be rewarded.
All board members and their teams need to become better financial managers. Access to real-time information will enable smarter, faster decisions and reduce the CFO’s workload. Financial responsibility can be delegated across the board, allowing them to manage exactly how their budgets are spent and be accountable for every penny. Manual accounting processes don’t give CFOs the support they need. Automated technologies can help them build stronger working relationships, and push the business forward.