The role of the financial manager has changed dramatically in a relatively short period of time; 2021 saw sustainability elevated on the C-suite agenda, new rules and regulations coming into effect in the wake of Brexit, and pandemic uncertainty causing further disruption to many businesses. It’s no surprise, then, that 97% of UK CFOs believe their role has become more complex in the past two years, according to the latest research by them. Tibalti. However, finance leaders have already been asked to reconcile several priorities, which means they are now wearing more hats.
If forced to face a new set of challenges, it will be important for funding teams to be willing to innovate and find new solutions to changing business needs. From becoming more attuned to the ESG classification to combating the burden of manual operations and tasks, here, Rob Israk GM Europe in Tibalti It explores what finance teams can expect to experience in 2022.
CFO to work closely with the CEO
In contrast to only managing financial operations and ensuring compliance, the CFO’s relationship with the CEO will intensify in 2022. This shift will result in the CFO being increasingly involved in looking at the strategic ways in which the business can grow and diversify.
Nearly two-fifths (39%) CFOs note a greater demand for collaboration with c-suite now than two years ago. However, organizations are still slowed down by outdated ways of doing business, with nearly a third (29%) of CFOs stating they have to deal with more manual financing. As a result, CFOs don’t have time to support the business leader in the way their job requires.
By innovating financial processes through automation, finance teams can save time on the most strategic, business-critical tasks. Indeed, UK CEOs believe that the ability to prioritize innovation (25%) and the ability to improve the accuracy and timeliness of financial and business reporting are the most important qualities of a successful CFO today.
Anti-fraud will become more difficult
Every year, the defense against fraud gets more and more difficult. With the increasing complexities of accounts payable, financial teams will encounter payment frauds at an alarming rate.
Today’s finance teams are tasked with managing more diverse payment methods, increased cross-border transactions and dynamic tax compliance and financial reporting. However, teams struggle to deal when operations are being processed manually. The most common perpetrators of payment fraud are manual processes. They are neither effective nor tight enough to ensure optimal financial control. Busy finance teams, escalating AP complexities and error-prone manual processing create the perfect landscape for fraudsters to take advantage of.
To mitigate these risks, companies need to take advantage of people, processes, and technology. This means investing in powerful technologies like automation to standardize procedures. Data entry will be reduced to a minimum, overall payment processing visibility will be improved and policy compliance will be automatic. Not only does AP automation ease workflow by reducing manual intervention, the technology serves as a hub for strong financial controls as the number of people and systems involved in payment processing is significantly reduced.
In addition, 2022 will see the emergence of more multi-entity companies as organizations realize the value of the “work from anywhere” model. It can be difficult to manage financial functions across these multiple entities, which is why different business units in geographic locations often manage their finances separately, with different processes and approvals being managed in different ways. However, with no oversight or central oversight, you run the risk of internal fraud.
Financial leaders to drive sustainability strategies
After COP26, business leaders are under pressure to set and achieve green goals, and many are turning to financial managers for solutions. In fact, CManagement organizations rated the integration of environmental, social, governance (ESG) and sustainability into their business and operations as the largest driver of complexity in their role (27%), surpassing even the global pandemic (22%).
One of the main reasons for this is that ESG ratings have become an important tool for asset managers and investors to evaluate and compare future investment prospects. Currently, more than a quarter of UK business leaders (28%) rate international growth as a top priority for the coming year, so a rating lower than ESG is not an option. So far, the challenge for CFOs has been to find time to work on sustainable initiatives.
The legacy of Britain’s exit from the European Union is not over yet
It’s been more than five years since the UK voted to leave the European Union – but it will certainly be on the agenda in 2022 as new regulations emerge. There are a number of challenges that Brexit brings, and much uncertainty remains.
While navigating the uncharted waters of Brexit, companies will face new hurdles when looking to fill roles, as the global talent visa makes competition for skilled employees more difficult than ever. With the visa application deadline passed, some employees may have chosen to return home to contribute to staffing issues for the finance teams.
Moreover, the UK has yet to agree to several major trade agreements. Businesses will need to remain vigilant – anticipate any changes on relatively short notice and be ready to adapt.
Increased concern for the financial team’s well-being
Along with many other departments, the great period of resignation means that finance is in turmoil. While the well-being of all employees will be a major focus for C Suite this year, CFOs will need to ensure that the work of the finance team is shared and talent is not wasted in tedious and time-consuming processes. Introducing automation to take care of those manual tasks will free up time to improve employees’ skills while making them feel valued in their role.
future finance office
Next year will surely cause the finance teams to revise how they operate. The emergence of a plethora of new responsibilities for the CFO, including implementing sustainable initiatives, leadership strategy, navigating the uncharted waters of Brexit and managing their team’s welfare, as well as combating the growing risk of fraud, means that finance teams must find ways to work more efficiently. By moving away from entirely manual and administrative work and moving towards new technologies and automation capabilities, CFOs will make time for the tasks that matter to them.