Why there is a need for a modern CFO amidst the global pandemic?

In the last four months, the world has become a far more volatile place than before. Economies have slowed down and businesses across sectors have plummeted.

Governments around the globe are trying ways to manoeuvre the situation and ensure sustainability through these extraordinary circumstances. Companies, too, are in a similar spot and are unwearyingly waiting for a revival.

While we are in the unlock phase, there is no timeline to when this economic pandemonium will end. Businesses are persistently looking for robust retrieval strategies to flatten the negative financial curve. Revival and business continuity are vital factors for all business owners.

Financial leaders are resolving immediate concerns and aligning for future opportunities to safeguard the overall financial status and performance of businesses.

In the current scenario, a modern chief financial officer (CFO) has a pivotal role to play. His financial acumen and reflective understanding of the global economic situation brings security and resilience within the organisation. A modern CFO is poised to analyse the situation, endorse changes in business strategies, and ensure unified execution with the help of his peers.

Here are some areas that a modern CFO must look into for optimising the resurgence process.

Leading the way

Today, a modern CFO is more versatile than ever. He is the financial strategic arm of the CEO and an effective business partner on board that foresees the big picture to navigate capital allocation and corporate leadership. He leads with intellectual and emotional agility to instill confidence in the internal and external stakeholders.

A CFO must be able to decipher comprehensive information promptly with precision. As a leader and partner, CFO’s inherent skills influence the overall decision-making forte of the leadership team. With policies moving from a growth mode to survival mode, a CFO is the most liable comrade of the company.

He is a critical part of the team that drives the innovation and survival blueprint for overall business success and subsequent growth.

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Reality check

A CFO is the epicentre of a company’s business and financial data; he is abreast of the company’s financial activities, as well as the performances of various products and businesses across the board.

On ground reality, this influences his decision which requires him to take a closer look at the business, plant performance, sales offices, or stores. He should be up to date with the current ecosystem to ensure his company adapts to the ever-changing dynamic business environment.

His factual approach and ability to seek what’s next keeps him on his toes, and agile to assess the financial crisis and attain justifiable growth numbers. A modern CFO is in complete sync with the company’s vision.

Accepting challenges

The sporadic economic scenario requires the CFO to stay ahead of a situation all the time. Fluctuating demand, customer requirements, regulatory changes, and uncertain financial situations, demands suppleness from a modern CFO to spearhead the organisation towards viable growth.

By chalking revival policies and a steady growth plan to manage these everyday challenges, the CFO imparts confidence in the leadership. Composure and compliance are the key attributes of a dynamic CFO.

Bold approach and wise decisions

As a financial consultant of the organisation, a CFO has to make some tough decisions to move tactically to attain sustainable solutions while working on a contingency plan. The decision can be prioritising a particular vertical, closure of a line of business, and more.

The financial health of the company is one of the most reviewed aspects of any business organisation at the moment. Some of the decisions to contain further losses and bring stability can be bold, and may not be perceived as the best solution in the eye of the common man. However, this decision is part of an infallible financial plan.

Understanding the opportunities emerging from a crisis is an expertise that the CFO offers. Investing, mergers, acquisitions, and launching new products are some of the decisions that may be considered to be most prudent.

Seamless flow of funds

Treasury management is critical to many of the key tasks facing a CFO. He keeps a stringent eye on the cash flows to ensure optimum liquidity. Managing liquidity, mitigating risk, and reputation controlling are some of the significant areas where a CFO plays a vital role.

The current situation has forced CFOs to run the business in tandem with the global economic situations, which is unnerving. Cash flow is one of the most integral components in driving the success of any organisation.

Good cash management outlines the good financial health of the company. Conserving cash and upholding a cash flow to run the business is the need of the hour, and the CFO must see that the organisation does not suffer at any given situation due to lack of funds.

Leveraging technology

One of the most important roles that bring together all the above-mentioned characteristics of a CFO is adapting and leveraging technology to build a seamless real-time information system.

A CFO is not only a custodian of past information but also the enabler of future growth opportunities. In the current situation, his focus on shaping a robust financial future is more important than accounting for what happened in the past.

Along with an understanding of risk management, a modern CFO needs to upskill to manage large data and understand the overall business risk. A CFO must digitally transform himself to understand data science, predictive, and prescriptive analytics to leverage technology leading to growth prospects. A digitally equipped CFO is a valuable addition to the organisation, specifically to drive objectives.

To conclude, a modern CFO is an influential and multifaceted resource. He is the one who keeps the financial balance of the company under consistent supervision.

Business and routine life will find its new symmetry eventually, while the pandemic continues globally. Thriving in the new normal is key for any organisation’s survival, which is in the safe hands of a modern CFO.