Taking on the uncertain future of financial services

How can CFOs protect their businesses for tomorrow and beyond as inflation continues to rise?

By Mark Blakemore, Chief Financial Officer at Compleat Software, the purchase to pay software house

Welcome to reality, where inflation is rapidly dominating the economy around the world. It is an inevitable phenomenon that no person or organisation can escape.

£1 in 2021 is equivalent to the purchasing power of about £1.06 today, crazy right? This means that today’s prices are 1.06 times higher than average prices a year ago with no real end in sight.

Financial concern is more prevalent than ever before, as UK inflation hits 10.1% and continues to rise at pace. This exponential growth is affecting almost all industries and has created huge uncertainty within the economy.

Businesses that have already been battling over the past couple of years are now fighting with even more challenges. This period places Chief Financial Officers (CFOs) in a very tricky position, and bears the question – what will the future hold, and how can CFOs ensure there is minimal impact on their business?

Past financial crises proved that acting fast and preparing is key, but what steps can CFOs take today, to protect their businesses for tomorrow and beyond?

We offer two such essential steps.

1. Make the best use of data

Data informs strategic direction. It allows CFOs to make decisions quickly and helps them to gain a complete view of the business, instantly.

From monitoring KPIs to measuring the performance of new initiatives, employees, and the competition – CFOs can use real-time, accurate data to get a view of historical trends and current activity, helping to plan the future – but the data needs to be accurate.

During this challenging period, businesses must look to boost their financial planning and analytics to ensure business continuity.

This means ensuring CFOs must have access to data, which is as close to real-time as possible. In the rapidly evolving environment, we find ourselves in, using out-of-date data may lead to a wrong strategic decision, which may have a significant negative impact on a business.

However, the very uncertain times we find ourselves in should be sounding the klaxon for CFOs to foster a data-driven culture within their organisations, so that accurate data guides the entire business.

In reality, this means that businesses should be investing in systems that can help to contextualise data into actionable insights, that staff at all levels can use to make decisions and act upon.

For CFOs to ensure their businesses are prepared for anything, they must be able to harness available data to evaluate their investments against performance, for both short and long-term goals; especially around workforce and IT investments.

CFOs should work with executive leadership to identify, and where appropriate, scale-up investments that provide value towards innovation and opportunity for business resilience.

1. Make sure you’ve got your workforce right

The way finance teams operate has changed, completely and permanently – this is down to a combination of technology and evolution in working practices accelerated by the pandemic.

For example, shifts to remote working have accelerated new ways of working, communicating and forced business leaders to take note of how they work. For those without businesses with the right systems and culture in place; remote working can have a very positive impact upon productivity.

Although some businesses are exploring the options of moving their workforces to an entirely remote setting, it does come with its own challenges that CFOs must consider, very carefully.

Shifting to this model can incur additional costs to help employees create an adequate home setup while meeting cybersecurity and other requirements. Equally fraught with considerations is a full return to the office, which comes with its own nuances, costs, and risks. In contrast, returning to the office can come with its own costs.

Not an easy ride for CFOs, who must consider the risks and benefits to each.

Automation must be the prime focus – regardless of where workers are

Automation should be a prime focus for CFOs – they should be (if not already) automating core business processes, in order to reduce the risk of external factors which unsteady their businesses, whilst working to foster long-term resilience.

For CFOs, they must ensure that their workforces are dynamic and can adapt to new ways of working. Workplaces, their leaders and staff have already undergone seismic shifts within the last few years. CFOs must establish new processes and systems for their teams, as well as the wider business, that enable seamless collaboration and coordination for the years to come.

Providing certainty in uncertain times

CFOs by the very nature of their role will always face difficult decisions in their quest to balance protecting their business in the here and now, while continuing to ensure the long-term strategy and goals are set and achievable to deal with the increased risks, in a challenging economic climate with the need to take measured risks that build the business.

The rocksteady CFO is well-versed in managing change, risk and financial strategy risk and change – as long as they have access to the accurate data, which relies on having the right technology at its core.

As they continue developing into the CFO of the future, however, their constant struggle will always be to manage the increased risk in a challenging economic climate with the need to take measured risks that build the business.