CFOs and their teams work hard to meet their deadlines today, but priorities will change as they see themselves as extensions of the CEO’s capabilities.
When you finish the financial close, what happens next? Some finance teams might want to break out the champagne. Others might at least offer each other some celebratory fist-bumps for meeting their deadline. Marty Borcharding, on the other hand, suggests moving onto more important matters.
The global BPO lead for media and entertainment at consulting firm CapGemini was recently interviewed about the workload placed on finance departments today, and what it means for the ability for CFOs leading them to make a more meaningful contribution. While the financial close can be an arduous undertaking, he argued it shouldn’t necessarily be considered the team’s most valuable achievement.
“While the accounting teams are the ones spending 90% of their time on the close and 10% analyzing the numbers, the charge is on the CFO to flip this ratio. To effectively use this time, CFOs must attempt to change the deep-seated mentality that finishing the close is the end goal for the accounting team,” he says. “Though timeliness and accuracy is critical, the close should be perceived as a non-event with increased focus on analyzing data which will bring additional insight and support the broader business goals and objectives.”
Non-event? That may seem insulting given the effort involved, but Borcharding’s point is that the right mix of automation and change management should allow that effort to be greatly reduced.
If analysis then becomes the “main event,” so to speak, how should CFOs think about their new mandate? A site called The Raconteur spoke with Mark Freebairn, partner and head of the financial management practice at executive search firm Odgers Berndtson, who reflected on one way financial leaders should view themselves: as a ‘mini-chief executive:
CEOs say, ‘I need a CFO who will second-guess me because that will make my decision-making more robust. I need a commercial equal in that role’ . . . If you look at a job specification from ten years ago, everything that was on there then is still on there today,” says. “But there are two more pages that weren’t there before and are there now.
If you truly think like a CEO with responsibility over an entire organization, it’s less difficult to view the financial close process as only one cog in the set of processes that allow a company to evolve, grow and succeed in meeting its business objectives. And you’re going to need a lot more than 10% of your time to provide the guidance to make it happen.