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The CFO faced many challenges in the past and overcame those challenges. The role of the CFO is not limited to only financial duties; they have many strategic responsibilities across the company. Rising interest rates, continue supply shortages and rise in energy costs ahead. Today, the CFO must be strategic, agile, and always on the ground to face the changes in economic and market conditions.
Towards 2023, CFOs must be attentive to crucial areas such as business risk and opportunities, talent recruitment and retention, and digital operations.
In today’s time, no company is in the same position as it was three years back; due to the pandemic, every business faces many challenges and sees massive changes.
This article discusses the biggest challenges which CFO will face in 2023. It includes many areas, such as rising costs, market shutdowns, talent crunches and technology risk.
The CFO is an acronym for the chief financial officer. It is a senior executive who is responsible for managing the financial decision of a company. The duties of the CFO are handling the Cashflow and financial planning as well as analysing the company’s financial health. If the company faces any issues, the CFO takes corrective actions.
Financial statements or reports prepared under a CFO must adhere to financial standards.
Nowadays, staff requirements have broadened, and the skills needed by the employee have also changed. CFO will face many challenges in finding people with the right skills to staff their departments.
As per the report, 80% of CFOs prioritise technology literacy when assessing new recruitments. The additional costs of recruiting workers with technical prowess make it essential to focus on employee retention with these skills.
Additionally, excellent communication skills are essential for the CFOs and their staff. The CFO believe there is so much scope for improvement in this area. Give training to current staff and focus on it for new hires.
During 2022, many businesses adapted new technology in new ways and found success in driving growth in revenue while connecting the workforce remotely. Additionally, technology execution to drive automation is a crucial challenge for CFOs in 2023.
The CFOs are considering growing technologies, like financial forecasting with machine learning, robotic process automation and block chain, to help maximise business worth and efficiency. As CFOs work on their investment returns calculations, they search for cost efficiencies in the company and set up targets to evaluate the effectiveness of investments.
CFOs as a guardian of the company, are responsible for managing the risk, including detecting and preventing fraud and investing in cybersecurity. CFOs recognise the requirements to protect sensitive data and the potential costs that cyberattacks can cause.
The expected stability of remote workforces adds a new section for CFOs handling potential fraud and cybersecurity risks and makes the cloud more appealing, providing its security gain.
The shift to a remote or work-from-home workforce offers opportunities and challenges for CFOs in 2023. Organisations, where this culture was thriving are reconsidering their investments in physical office space. The cost savings and returns on technology investments and employee benefits favour continued hybrid options or work-from-home.
The CFOs challenged by most-cited that remote workforces are exhaustion for the employee and the requirement to rebuild the culture. According to a report, In 2020, doing work from home, most CFOs, and by extension, their staff, increased the number of hours they worked to 50 to 60 hours per week or more.
In 2023, it will be challenging for CFOs. In the present stage, CFOs are commonly responsible for ensuring regulatory compliance for their organisations. For example, historical changes in GAAP (generally accepted accounting principles) on lease accounting, disclosures on environmental is increased, societal and governance (ESG) factors, and modifications in fair lending reporting required significant compliance projects. CFOs will likely depend on external auditors to help execute any other future changes.
The CFO’s challenge is to ensure their companies are well-established to capture the earned growth they may have seen through 2022. Strategic CFOs understand that businesses can’t do cost-saving for growth, but they can invest consciously.
They appreciate that companies spend less amount of money to gain new businesses and empower core operations. Helping to increase revenue through customer growth, launching new products and mergers and acquisitions are at the forefront of many CFOs’ minds.
The macroeconomic and political climate has 67% of CFOs focused on tax policy and regulatory risk. Abandoned state budgets may also cause a change in state-level tax. Universally, changes in international taxation, like value-added tax (VAT) and goods and services tax (GST), may significantly impact operations, as will changes to policies of international trade. In 2023, how these changes will impact the businesses and CFO will understand this to mitigate those using scenario-planning exercises.
CFOs have a lot of things to do in 2023. Modern software quick fixes are built to manage many of CFOs’ toughest challenges. ERP systems, for example, deliver multiple consolidated modules that support financial management and planning, order management, production management, supply chain management, warehouse and fulfilment and procurement.
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