CFO challenges in 2023: Their top priorities

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The  most common CFO challenges for 2023.

Post-pandemic, as businesses face digital and radical transformation, the role and impact of finance functions have expanded significantly. 2023 seems to be a year loaded with challenges for CFOs. However, by embracing technology, CFOs can predict trends and scenarios better, enhance operational performance, lower risk and navigate an unpredictable global business environment.

Key challenges & priorities for CFOs in 2023

Moving forward, CFOs are expected to take on additional responsibilities to help their companies build resilience. Through critical decision-making backed by financial data, CFOs can secure a competitive advantage with digital transformation and sustainability initiatives.

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As businesses face formidable challenges this year, the key priorities CFOs should focus on are the following:

1. Talent acquisition & retention

According to a recent Gartner survey, the most challenging task CFOs will face in 2023 is finding people with the right skills to staff their departments. So CFOs must deploy various strategies in collaboration with HR partners to ensure critical roles remain filled while protecting margins.

To fulfill this challenging task, CFOs need to focus on:

  1. Hiring and retaining the right talent: When evaluating new hires and retaining employees, along with financial expertise CFOs need to prioritise technological literacy and communication skills. Having the right mix of talents in the finance team enables CFOs to attain growth objectives fast, make insightful analyses, and forecast with higher accuracy.
  2. Supporting remote workforce: The shift to a remote or a hybrid workforce as an after-effect of the pandemic provides both opportunities and challenges for CFOs in 2023. CFOs have a prominent role in helping their companies adapt to the hybrid environment, and realise higher productivity gains and employee satisfaction rates with location-flexible arrangements.
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2. Enabling and securing post-pandemic growth

In 2023, CFOs hope to achieve long-term growth goals, despite the economic instability. To secure growth, CFOs should make calculated choices about spending and investing–either by adjusting pricing strategies and addressing demand, strategic hiring or through mergers & acquisitions.

To enable business growth, CFOs should prioritise the following:

  1. Steering through economic uncertainty: Due to the current fluctuating markets, potential recession, and political turbulence, CFOs need to be aware of the associated risks. They must utilise a more flexible and data-driven approach in scenario planning to model the potential impacts of market risks.
  2. Accurate forecasting: Another top challenge CFOs face is to capture future opportunities. Tools like predictive analytics, and key performance indicators play essential roles in helping forecast and identify opportunities for faster adaptability.
  3. Liquidity/cash-flow monitoring: A current global survey of CFOs by Everest Group, funded by WNS, reported that for most CFOs, cash flow improvisation is a high priority. With an automated cash flow monitoring system, CFOs can make well-informed and proactive business decisions leading to improved cash flow.

3. Reinforcing compliance & risk management

CFOs are primarily liable for ensuring regulatory compliance for their companies, and 2023 brings along a fresh set of challenges for them. Robust compliance and risk management practice must be a high priority for CFOs in 2023. They can achieve this by:

Ensuring robust ESG Compliance: One of the top CFO challenges is improving data management to handle unpredictable economic scenarios and issues like ESG (Environmental, Social, and Governance) reporting. CFOs must leverage new technologies to help their organisations achieve sustainability goals. Averting fraud and investing in cybersecurity: CFOs understand the need to protect sensitive data and the possible costs that cyberattacks can cause. Risk management is thus another tough challenge for CFOs, which includes identifying and preventing fraud and investing in cybersecurity. Amidst the recent rise in cybersecurity issues, CFOs must be well-prepared for risk-management scenarios.

4. Embracing technology & automation

Post-pandemic, many businesses embraced technology in new ways and successfully drove revenue growth. Technology implementations to drive automation are a crucial challenge for CFOs in 2023. Further, automating processes like accounting, reporting, or customer support would be more beneficial than manual data entry.

CFOs must:

  • Improve visibility & reporting: Using technology, CFOs can optimise cash flow for the short and long term with increased visibility. For instance, real-time financial data displayed on a software's dashboard improves visibility and is the basis for competent decisions.
  • Integrate new technologies: In 2023, CFOs will have to position themselves at the forefront of innovation and integrate new technologies into their existing systems.

What every CFO needs to know in 2023

To be a better and more successful CFO in 2023, a few crucial factors that every CFO must consider are:

Strategic utilisation of data analytics

A CFO must improve their understanding and utilisation of data analytics to make informed decisions for the company. Automated processes can streamline the analysis of data sets and can also facilitate the compilation and distribution of reports.

Leveraging investments

CFOs need to identify the critical areas where investments should be accelerated (human capital, digital investments, etc.) while optimising costs. By assessing a company’s current tech usage and identifying where technology has had the most significant impact, CFOs can determine which areas need additional investments.

Enhanced team collaboration

CFOs should strive for greater collaboration internally (between teams) and externally (with customers or vendors) by utilising real-time communication tools and cloud-based sharing platforms. They should focus on building a culture that fosters collaboration among team members by providing a supportive environment and encouraging diverse thinking.

CFO challenges in the upcoming years: The road ahead

Since the current business scenario is filled with uncertainty, one thing is evident - CFOs ought to take on a more strategic role within the organisation. CFOs need to demonstrate their leadership not only by driving cost controls but also by developing strategies and initiatives that will harness the power of technology to enhance organisational performance.

Embracing technology can assist them in making strategic decisions — from hiring to investments — and be prepared to manage shocks and capture opportunities ahead.

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