Top Challenges of Today’s CFOs: How FAO Turns the Tide

February 6, 2024 Megan Weis, CPA, MBA

CEO reading the challenges of CFOs

As a CFO or finance executive, you likely know that outsourcing your Finance & Accounting processes can be an easy and effective way to drive significant savings. But done well, a Finance & Accounting Outsourcing (FAO) provider can do so much more for your business, freeing you from many of the headaches and challenges that plague today’s CFOs and enabling you to drive business results rather than simply report them. But what exactly are the challenges of today's CFOs?

More Details: How the CFO Role Has Evolved: Becoming a Comprehensive CFO

Below are just a few of the challenges of today's CFOs afflicting modern-day finance organizations and a description of how partnering with an FAO provider can help.

  1. Limited Resources & Lean Accounting Teams

  2. Disparate Systems & Unused Technology

  3. Scarce Talent in a Tough Accounting Market

  4. The Inability for Midsize Businesses to Scale

  5. A Lack of Data-Driven Decision Making

  6. Little Insight Into Customer Behavior

  7. Rapid Advancement of Technology

CFOs' Limited Resources & Lean Accounting Teams Challenges

cfos meeting with lean accounting team to address todays challenges

In today’s tumultuous business environment, it’s more important than ever for a company to remain agile. Resources, both talent, and capital should be invested in areas that will help to differentiate the business. The Finance & Accounting function, no matter how well run, rarely plays a role in differentiating one business from the next. Why not give part (or all) the transactional accounting function to someone who can run it more effectively for a fraction of the cost?

Companies are asking financial leaders to do more with less consistently now, and between the need to cut costs and fill chronically open accounting positions, CFOs are left with a challenge to do the impossible. Outsourcing provides leaders the opportunity to retain workload while cutting costs and direct limited resources (both people and time) to the things that are top priority for the growth of the business.

Just Started Looking into FAO? Read This First: Finance & Accounting Outsourcing 101

Disparate Systems & Unused Technology: A Growing Pain Point for Modern CFOs

Technology causing CFO to stress out

Many companies, particularly those that have grown through multiple acquisitions, are running numerous ERPs and technology platforms. Or, they have invested in technology to seemingly solve their problems and still lack the human talent to run said technology.

First, let's address disparate systems. These disconnected systems often require manual rekeying of data, and are one of the main reasons that many organizations are still struggling with a month-end close that resembles a fire drill. They create reports that are too late to make an impact, too difficult to understand and too often done in Excel. Additionally, they have limited capacity or ability to track business metrics and perform root cause analysis.

Read More: We Ranked the Best ERP Software for Midsize Business

More often than not, even companies that have one streamlined ERP, and have spent the time, effort and budget on implementation, do not have the team they need to effectively use the software. They have tried to solve a people problem with technology and seem to still be running into the same issues month after month. The solution? Working with a technology-agnositc FAO provider that brings the talent to the technology (any technology, in fact) to finally fill those gaps in human capital. This leads us to our next challenge (it's a big one) of challenges of today's CFOs - a tight accounting talent market, which leads to accounting teams unable to get everything done.

Scarce Talent in a Tough Accounting Market

today's cfo interviewing for accounting talent - new challenges

It’s more difficult than ever before to attract and retain accounting talent. As business continues to become more global and governments struggle with trying to find common ground on uniform accounting standards, the question becomes how do organizations seek and secure top accounting talent?

Further compounding the problem is the fact that baby boomers are retiring and a new generation, with very different career goals and employment needs, is taking their place. And if you’re planning on upgrading technology from a legacy system to a more mainstream platform, be prepared for increased attrition once you train your employees to operate the upgraded system as they will now have improved and more relevant skills to market.

Listen for More: [CFO Weekly Podcast] Scouting for Accounting Talent with Cliff Edwards

How Finance & Accounting Outsourcing helps: Service providers have access to large pools of very qualified, college-educated resources in offshore locations (think - the Philippines), many of whom have their CPA license and public accounting experience. Why use your limited recruiting resources to hire for a function that, although critical for running your business, is not differentiating you from your competition? A qualified service provider, particularly a niche provider who can provide personalized services, will work with you to hire talented resources to your exact specifications.

The Inability for Midsize Businesses to Scale

CFO talking to his team about scaling challenges in today's environment

As a CFO, a big part of your role is helping to guide the constant questions that arise when thinking about scale. It’s critical to have an overall and cohesive vision for all of the important staffing, systems and process decisions that you implement. You have to keep in mind the impact these decisions will have for the implementation of your overall business strategy. Hiring a great team or selecting a great ERP won’t ensure success unless there is a crisp vision for how everything will be implemented and managed.

Essentially you want to make sure you’re seeing the forest and not just the trees, which isn’t always possible given an ever-changing landscape. As a company grows from start-up to medium and then mid-market enterprise, the best-laid plans often go astray and the result is usually a combination of disparate systems and a general lack of talent that makes it difficult for many companies to scale.

An outsourcing service provider can help by consolidating systems onto a single platform, standardizing processes, and providing the talent necessary to scale the business quickly and effectively. This allows you to concentrate on growing your core business, while you leave the F&A function to someone who delivers that exceptionally well as part of their core business.

Read More About the Hidden Benefits: Improving Accounting Processes Through Outsourcing

In Today's Market, Lack of Data-Driven Decisions Creates More Pain Points for CFOs in the Long Run

CFO making note of Pain Points and challenges

With disparate systems, a lack of talent and the need to do more, comes a multitude of manual and inefficient processes that make it difficult enough to report numbers after the fact, let alone in real-time. Reporting historical results in an environment like this is difficult enough and reporting in real-time is completely impossible.

The ability to focus on data-driven decision making (and having the real-time data to do so) is often difficult for teams that are already strapped and struggling each month to close the books. As the world becomes increasingly complex, real-time data to aid in decision making is becoming critical for the survival of a business.

An FAO provider can work within your technology to deliver F&A services that more effectively manage workflows and deliver real-time insights. This real-time reporting equips their clients with the data necessary to better handle uncertainty and make more informed decisions regarding their business.”

Little Insight Into Today's Customer Behavior Creates More Challenges

Person holding phone with insights graphic overlay showing customer behavior icons

In addition to limited decision-making abilities, a lack of data and scarcity of time preclude the ability to delve into customer behavior, which is vital to company growth. When your core talent is able to focus on strategic initiatives instead of being dragged down by transactional work, it becomes possible to not only see the big picture but to drill down into customer behavior - including specific groups of customers, a single customer, and even single transactions.

As the CFO evolves into the right-hand to the CEO and is responsible for a slew of other responsibilities from strategy to M&A, using an FAO provider can allow the enterprise to determine which are their most profitable accounts, identify the characteristics of those accounts, and bring those to their sales department to close new clients. Additionally, credit terms can be customized based on customer behavior, allowing those who regularly pay in a timely fashion to enjoy more lenient credit terms and cracking down on those who don’t with tighter credit terms and by prescribing a set of actions that encourage on-time payment.

Get the eBook: Building B2B Customer Relationships that Last: The Ultimate Guide to Making Your B2B Clients Love You & Never Leave

An FAO service provider delivering F&A services with top talent on your technology provides the transactional work you need to act on your data, helping you achieve these types of meaningful insights into your business, and finally, making F&A a strategic partner to the business.

Rapid Advancement of Technology Has Proven to Be a Pain Point

today's CFO overcoming challenges and enjoying the benefits of rapid advancement of technology

Just like in all areas of business, technology within F&A is quickly evolving. Automation, analytics – both predictive and prescriptive – cognitive capabilities, both FAO and technology providers alike are investing heavily in these areas. It is not possible for an enterprise to keep up with this level of investment in a non-core function and many of your competitors have already made the decision to outsource and are taking advantage of the benefits these technologies can deliver.

And without the team in place to implement and work within these technologies, CFOs and financial leaders will continue to see missed deadlines, mistakes and a lack of time for important strategic work. Alternatively, when you outsource FAO to a provider, you'll be free to focus on the priorities including keeping up with competitors in any and all advancements.

Check Out: People + Technology: Why People Still Matter in the Age of Automation

These challenges of today's CFOs are ever-present for modern Chief Financial Officers. Never before has there been more expected of this role with less time and talent to get it done right. At Personiv, Finance & Accounting Outsourcing is what we do. Check out our Winning Blueprint on Building an Efficient & Effective Accounting Team for more information on how FAO can help.

Better yet? Contact us to set up a call and we can answer all your questions.

About the Author

Megan Weis, CPA, MBA

Megan manages the world-class Finance & Accounting Outsourcing (FAO) offering at Personiv. She combines over 20 years of finance and accounting experience with business processing outsourcing expertise to deliver exceptional value to her clients. Prior to joining Personiv, Megan was VP of Business Process Services at Everest Group, where she specialized in keeping abreast of the latest trends in FAO and consulting with large global outsourcing providers to create best-in-class FAO services. Megan holds a Bachelor of Business Administration degree in Accounting from Kent State University as well as an MBA from Duke University’s Fuqua School of Business.

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