In 2020, many employees, companies, and entire countries had to pivot and swiftly transform how they operate in response to an unprecedented health crisis.
As the end of the pandemic lockdowns come into view, many of us are seeing the emerging trends in finance and accounting that have resulted from the massive transformation businesses have undergone.
In particular, we’ve seen how the CFO’s strategic role become more integral than ever in a company’s financial well-being, and their strategic insights will only become more useful in the near future.
In a study conducted in June 2020 by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), which surveyed 1,152 ACCA and IMA members, as well as non-member CFOs and chief executives, 72% reported that they felt the role of the CFO will either increase or significantly increase in the next 3 to 5 years.
As CFOs face new challenges for their companies, such as the shifting expectations of their shareholders, rapidly changing regulations and consumer expectations, they have to stay up to date with the various emerging trends in finance and accounting to inform their decision-making.
Here are a few trends in accounting and financial services that we have observed.
Last year, many companies shifted to remote work to continue operations when shelter-in-place orders were implemented in different countries.
In a June 2020 survey by PwC, 54% of CFOs plan to make the remote work setup a permanent option for employees. As CFOs opt to keep their staff working from home, new challenges have cropped up that had to be immediately addressed, such as the need for cloud-based tools and appropriate devices for remote work.
Now, there remains the challenge of leading and managing a team that you only meet virtually. Implementing flexible working hours can be explored for teams to adapt to their members’ different personal circumstances.
With the help of HR, CFOs need to contribute towards building and maintaining the corporate culture in order to keep employees engaged and motivated. Employee engagement activities such as special virtual events and company-wide town halls can be good for boosting the team morale as employees continue to work from home.
In the same report by the ACCA and IMA, CFOs believed that the crucial role of risk management cannot be understated. In light of recent events, CFOs decided that risk management should be a higher priority, with one CFO recognizing that they could have been more rigorous in their planning and risk assessments prior to the pandemic.
As businesses strive to recover and become more stable in 2022, the role of risk management will increase in importance. Essentially, CFOs have to have a clear plan to make the company less vulnerable in the future to risks introduced by the business, the CEO, or external factors.
Another key area of growing importance is corporate governance. Better governance can translate to improved transparency and accountability within a company’s existing systems, and this can have a more pronounced impact on the business’ viability in the long run.
In a 2018 report by KPMG, 59% of CEOs said that acting with agility is the new currency of business, and that if they are too slow, they will go bankrupt. This sentiment, while it sounds like an exaggeration, has proven to be accurate in the pandemic.
Regardless of the industry they are in, CFOs have to build the right systems and processes that enable the finance department to overcome any challenges that they may encounter.
Digital transformation plays an important part in this area, as financial leaders have to be cognizant of the limitations and capabilities of their current platforms and systems in order to guarantee a good fit with their own employees and processes.
As businesses work to return to a position of consistent growth, finance teams are well-positioned to steer the company to the path to success.
With a competent and well-informed CFO at its helm, an effective finance team can be well-positioned to restore the company in a position where they can continue to thrive.
Find out how you can benefit from an outsourced finance service provider. Read more about outsourcing and how it can help your business in the post-COVID-19 landscape through our downloadable PDF, A Complete Guide to Outsourcing.
Contact us directly to book an appointment with our financial outsourcing experts.