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3 ways tech tools are changing the way CFOs do business
Posted by Grace Townsley
May 12, 2023
As the business world evolves at the speed of life, the role of the CFO has become increasingly complex. Today, CFOs are expected to navigate a range of challenges, from risk management and financial planning, to driving growth and monitoring performance reports.
It’s a big job, even for experienced CFOs. But a handful of emerging tech tools are giving CFOs greater access to the data and forecasts they need to lead with confidence.
Together, these new tools are reshaping how CFOs work. Instead of spending everyday digging through data and comparing reports, they’re empowered to focus on the high-level activities and strategic decision-making necessary to push the company forward.
In this article, we’ll look at three big ways technology is rewriting the CFO’s job description — and improving information access at every level.
1. Modern software is making real-time cash management and metric-monitoring more than possible
With advanced reporting software and tracking tools, CFOs have real-time access to a wide range of financial data and KPIs. In just a few clicks, they can track cash flow, income, performance metrics, timelines and forecasts — and recognize big opportunities and threatening risks even faster.
Cloud-cost managers that help CFOs track their cloud platform usage make minimizing expenses and mapping costs to specific business outcomes simple. This tool alone increases margins and gives CFOs greater visibility into what expenses drive which results.
Enterprise resource planning systems (ERPs) also offer CFOs a 24/7 dashboard-style view of revenue growth, costs and company-wide KPIs. Metrics that used to take days to compile can now be pulled in a matter of seconds — everything from employee performance reports and staffing data, to project timelines and projected demand.
Cash management and KPI tracking used to be a quarterly or monthly activity. But with these user-friendly tools, CFOs can have a better understanding of their current financial situation, and financial future, at all times. That leads to faster revenue growth, stronger decisions and a healthier company.
2. New tech tools are streamlining the financial planning and analysis (FP&A) process for CFOs
With automated FP&A tools, CFOs have access to a better set of reports, forecasts and analysis that they can leverage to make smarter, faster, future-focused decisions.
The amount of information a CFO must process in order to build a forecast or compare multiple decisions is staggering. Because the volume of data is too great for a human to analyze, and models can fail to account for unexpected market shifts, FP&A tools offer a valuable way for CFOs to eliminate bad decisions and narrow in on profitable ones.
AI and machine learning add to the value of new FP&A tools by improving the modeling and speed of your tool’s financial analyses and recommendations. These technologies allow CFOs to input an even greater volume of data, which gives the tool stronger insights and better predictions. Plus, FP&A tools that use AI are capable of recognizing patterns and opportunities that aren’t always apparent — even to seasoned CFOs. Regardless of your company’s size, this insight can translate to considerable cost savings or added revenue.
Many of today’s FP&A tools are designed to work on top of an existing ERP system, integrating seamlessly with the software and data tracking systems you already have in place. These systems take your ERP reports one step further, applying additional variables and contingencies, to improve the accuracy and depth of every forecast.
3. Tax and accounting automations save CFOs time and resources
If your teams are still manually completing tax and accounting tasks, like monthly closing, data entry, and quarterly statement preparation, robotic process automation (RPA) tools can significantly speed up this process — and improve your accuracy, compliance and efficiency.
For example, simple accounting automations can automatically reconcile bank statements, credit card statements, and other financial documents, reducing the need for manual reconciliations. And tax automation tools can save CFOs considerable time, and keep them compliant with tax regulations, by automatically calculating taxes, filling out the necessary forms and preparing tax returns for the CFO to review.
These kinds of tasks, or the oversight of these tasks, used to be a big part of every CFO’s job. But today, tech tools streamline much of the accounting, payroll and tax process, freeing the CFO up to focus on reviewing final numbers. This ability to shift attention away from tedious tasks, towards strategic initiatives, gives CFOs the added mental space they need to make stronger decisions with less risk.
Today, CFOs are learning to do more with less
Adding financially efficient software to your CFO toolkit is one effective way to strengthen your company’s decisions and save your team time. Another way is to consider outsourcing your CFO functions to a firm that specializes in using the latest CFO technology to offer the strongest business guidance. Both CFO tech tools and outsourced CFO services can offer your company the opportunity to reduce time, errors and oversights, while improving your ability to maximize the market you’re in.
Want more? Escalon has helped over 5,000 companies across a range of industries to optimize routine business functions, like taxes, accounting, HR and payroll, and operate more efficiently. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact ushere.