There seems to be a divide happening in finance between CFOs and their accounting teams.
In a recent survey, 70% of CFOs declared that they ultimately trusted the numbers they were reporting to the greater business and its stakeholders, while only 38% of accountants could say the same.
This disparity calls for a deeper look into financial reporting and begs the question: Why?
The changing role of the CFO
The role of the CFO has become broader and more strategic over time. The people who traditionally filled these roles were often CPA-trained with extensive experience in areas like public accounting or corporate finance.
Now, a solid understanding of accounting rules is the barrier to entry. CFOs are increasingly expected to be strategic partners to the CEO, possessing a deep understanding of operations and an ability to connect back-office functions to larger company initiatives, like driving company growth.
This is a good thing. We’re often discussing how important it is for finance to act as a partner to the business. But it seems like there might also be some drawbacks.
Without being intimately familiar with the rigor of reporting activities, after doing them as an accountant, some CFOs lack a natural appreciation for the effort and margin for error that exists at month-end.
CFOs must find ways to harness the knowledge and power of their accounting and finance teams to balance their newfound responsibilities with the mandatory reporting and forecasting duties of the more traditional CFO role.
Strategies for the CFO’s success
While discussing this topic with Molly Boyle, BlackLine’s senior manager of Solutions Marketing, three main areas of focus were brought to light. To ensure trust in the numbers, today’s CFOs need to invest in:
- People. Hire the right people. This means professionals with skills beyond basic bookkeeping who are also equipped to analyze financials through the lens of business strategy. Spend the necessary time and money to recruit, train, and develop this type of talent for the future of your business.
- Process. Invest the time needed to understand legacy processes and be humble enough to admit that processes might need to change. Understanding best practices and striving to meet them in your operations will set you up for success. This might require a larger culture shift, but it’s worth it in the long run―and your teams will respect your leadership to get processes where they need to be.
- Technology. Adopt finance automation tools that have best practices built in and make the transition less arduous, while also allowing for scalable, sustainable growth and change. By leveraging leading technology, you’ll find newfound trust in the numbers and richer visibility into both accounting processes and talent.
The CFO’s role is expanding, often suspending them between different but equal responsibilities: managing risk and driving strategy.
The more traditional activities need to be prioritized within the larger context of their jobs, and we’ve outlined some ways for that to happen while still acknowledging and participating in the larger mission to drive business strategy alongside the CEO.
The equation is this: People + Process + Technology = Trust.
While it’s obviously not as simple as 1, 2, 3, this broad outline should give you some ideas for how to begin bridging the trust gap between accountants and finance leaders.
For more on this topic, please read Mistrust in the Numbers: The Global Scale Of Financial Data Inaccuracies.
This article originally appeared on BlackLine.com and is republished by permission.