A new report from CFO Research in collaboration with Kryiba highlights shortfalls in CFO performance relative to Board of Director expectations. The research further explains that the deficits fall into categories like risk management, strategic decision support and cost reduction.
It’s time for CFO’s and all FP&A leaders to challenge legacy process, providers, pricing and yes, people to move toward best-in-class. The alternative is stifled growth, escalating costs and financial loss.
The survey of companies with annual sales revenues of $100 Million to $5 Billion cited opportunities in the following categories:
- Managing business planning and continuity (cited by 52 percent of the survey respondents)
- Managing financial risk to prevent loss (51 percent)
- Reducing costs and improving margins (43 percent)
- Helping unlock working capital to spur growth (37 percent)
- Ensuring regulatory compliance (30 percent)
Every Treasury professional reading this just said, “wait a minute, that’s what I do”. Sound working capital and treasury management encompasses business sustainability, scalability, risk mitigation, compliance and liquidity management.
CFO’s are challenged to straddle the line between a strategic and tactical focus. This tight rope act sometimes leads to an imbalance favoring the near-term accounting and financial statements which are integral to Board of Directors, Investor, Analyst and Bank reporting. The compromise leads to a drift from the operational disciplines and sustainability offered by Treasury.
It is time for Treasury to reaffirm its position in the FP&A arena and contribute to the strategic decision making ability of their organizations. A headwind and contributor to the imbalance is the historical cost-containment focus in Treasury which has led to staff reductions and limited resources.
To regain lost ground Treasurers must focus on people, process, providers and pricing and appropriate all available internal resources in order to succeed. The good news is that there are external advisors with the necessary strategic and tactical expertise available to help.
Every Treasury professional reading this just said, “wait a minute, that’s what I do”.