CFOs are always one step behind. Here is why they should embrace automation to get ahead.

The future of the CFO is digital and automated. I think this is clear to anyone who runs a finance department. 

In today’s volatile financial market, companies’ ability to manoeuvre and reduce financial risk has become ever more important. There are rising expectations that finance departments go beyond focusing on historical performance to become a critical strategic character who can quickly process financial data and produce forecasts to make informed decisions about the future of the business. 

In spite of this, CEOs and CFOs in SMEs lag behind in providing finance departments with the planning tools they need to become automated. Especially when you compare it with other business functions that are running on fully-automated workflows and moving at a much quicker pace. 

For the past year, the team at Francis.app has spoken to more than 250 executives around the world. During these conversations, it has become clear to us that, while enterprises are implementing automation in their financial planning processes, something is holding back SMEs. 

Fundamentally, business solutions can create value by increasing revenue, reducing costs, or removing risk. Improving topline performance is impactful and often the easiest to measure, making a strong case for leveraging automation to optimize sales and marketing early on. 

The finance department, often more focused on reducing costs and removing risks, has also seen exciting innovations in recent years. Many solutions have emerged to improve expense management, bookkeeping, invoicing, bank services, and payroll — all key tasks to running a business. 

However, almost 40 years after the introduction of the traditional spreadsheet it is still the preferred tool for forecasting.

And yet, when we encounter financial models, they are often outdated, a bottomless pit of maintenance, or overwhelmingly complex, with many CFOs exclaiming that they have built a Frankenstein monster. Traditional spreadsheet models rely heavily on upkeep, aren’t natively connected with other tools, and don’t have purpose-built financial planning features. It requires a lot of time and is highly prone to errors. 

Safe to say — financial planning needs a SaaS upgrade. Preferably one that preserves the flexibility and intuitiveness of spreadsheets. 

Incorporating automation into financial planning provides real-time insights, frees up time spent on repetitive work, and fosters better collaboration. If you can’t measure it, you can’t improve it. Automation helps you do just that in good time. 

So let’s back up to my original statement. What is the future of the CFO and the financial department? 

We see that companies more actively use real-time performance data for strategic analysis and decision-making. Making the company’s financial data readily available and enabling new ways to work with it set companies up for success. 

The future of planning is a real-time overview of financial plans and performance across departments, versions, scenarios, and stakeholders that all ties together. Every stakeholder will have access to the information that’s relevant to them and managers can collaborate on and experiment with different plans. 

For venture-backed companies, It is clear that investors now focus more on budgeting and forecasting than a year ago. Investors call for disciplined runway and P&L tracking, scenario planning, and regular follow-ups. Their expectations for SMEs are simply higher. 

The conclusion is that the agility of the CFO will be even more pivotal to business success than before — from planning resources properly to ensuring that the business is attractive to potential investors. 

To achieve this, we need to move financial planning and forecasting from static spreadsheets to one that is dynamic and gives you a real-time overview of your business.