In its latest quarterly survey of CFOs and finance directors, NetSuite has asked financial leaders about their roles, the issues they face and their expectations for the coming year. You may find some of the results surprising.
Renewed CFO Confidence
Earlier in the year, in an effort to conserve cash, CFOs and finance heads responded to the pandemic by quickly cutting back on spending.
Now though, they are more confident and are looking to rebuild their businesses, so are set to spend again. And more so than other leaders in their companies. While non-financial leaders are still backing cuts, CFOs want to increase expenditure, aiming for a return to spending levels as they were in early 2020.
Considering that finance heads are usually more conservative than their board-level peers, this is a surprising finding. But NetSuite attributes this to two things.
Firstly, finance executives consider that growth is still important to the business. CFOs recognise that a certain level of spending is necessary if you want to achieve growth. To balance out some of the cuts made in 2020, new spending in 2021 is acknowledged as vital, so that their businesses can continue to see upward trends when it comes to revenue and profit.
Secondly, CFOs know their budgets inside out. They have witnessed executives making difficult decisions and agonising over which cuts to make. They have been responsible for some of the outcomes themselves. Many of the respondents had commented how they had tried to be extra mindful about cutting payroll expenditure during 2020. By opening new sales channels – like selling direct to customers via ecommerce, for example – they had been able to continue to generate sales. So, CFOs recognise that, to continue with this, there is a certain amount of investment needed, and they have determined to encourage renewed spending on technology and people.
The Challenges for CFOs in 2021
Pressures caused by the pandemic have had a toll on finance directors. Compared with last year, three-quarters of those in financial leadership roles are finding their jobs more challenging than before.
The most demanding challenge is juggling too many responsibilities, which is felt by 51% of respondents. The next four challenges are: managing cash flow (43%), developing accurate financial scenarios (43%), producing timely accurate reports (37%) and implementing technology for finance (33%).
More than half reported that they were working long hours – more than 50 hours a week – to cope with these pressures.
Potential Solutions for Finance Directors
With CFOs bullish about spending, but frazzled about the demands of their own roles, there is an obvious solution.
Employing more automation to manage the processes and workflows seems the natural solution. With the continuance of remote working, and a move to more sales being made online, then investment in the technology to do this will not only enable companies to continue to sell well, but it will also relieve some of the burden on the finance department, by automating much of the repetitive and manual admin tasks.
Nearly three-quarters of CFOs (74%) place a significant focus on financial planning and analysis. Automating aspects of the finance operation would allow them to concentrate on this important area.
The Outlook for 2021
Optimism for the coming year is high amongst those surveyed. Sixty-nine per cent of CFOs and 72% of non-financial leaders are “somewhat” or “very” optimistic about the outlook for their business for 2021.
Fortunes due to COVID-19 are mixed, though. About a third (31%) of company CFOs reported an improvement in the business, while 16% said it was about the same, 36% stated it was somewhat worse and 17% said it was substantially worse.
It is apparent that business has changed for most companies during 2020. Responses backed this up, with around half saying that how they used technology, acquired customers, generated leads or ran their operations had changed “completely” or “substantially”. When those who said these aspects had seen “some” change, the figures increased to between 80 and 90% for each.
While the most pressing concern in the summer of 2020 for CFOs was identifying areas for savings, this has lessened and the biggest issue now for finance leaders is using data more effectively and producing better reports and KPIs.
It’s here again that finance leaders can employ technology to help. Not only will it help them work fewer hours, but ERP such as NetSuite can help them with far better data on their operations, which they can use to shape more effective plans and decisions.
Read the full report: CFO Insights Survey, Leading the Growth Charge
If your financial priorities match the findings of this report, then NoBlue can help you with a free consultation about implementing NetSuite, the number one cloud ERP software. It gives you better data and can automate your financial functions for more effective working. Book an appointment now or contact us today.