What do CFOs need most? That might seem like a loaded question, but the answer is simple: They need tools and systems to make more strategic decisions and promote growth. Many CFOs use reporting systems that lack centralized data, leading to an excessive number of components and unnecessary manual processes. Data is the key to CFOs' decisions, and without a centralized system that allows them to view and access that data, they cannot make proper strategic choices.
As pools of data grow larger and demands for data-driven insights increase, CFOs likely won’t see a reprieve from this situation anytime soon. To meet the demands of an increasingly data-hungry C-suite, CFOs should consider implementing a more efficient reporting system.
Obstacles to Efficient Reporting
CFOs face two primary issues in implementing efficient reporting systems: usability and adoption. These problems have become larger over the past few years as more tools have arisen to vie for executive attention.
Many companies have their finance and HR data spread across multiple systems, according to PwC. When organizations use several systems for reporting, CFOs and their teams struggle to switch from one system to the next. This overabundance of options leads to data errors and time-consuming administrative processes. Once the company adds another system to account for the shortcomings of the others, users must begin the adoption process from scratch, correcting old errors while opening the door for new ones.
Most of the time, CFOs who implement new systems lack execution plans to feel the full benefits of their new products. Many CFOs find themselves muddling through unfamiliar programs due to a lack of training — an issue that's easy to avoid. The implementation process for a human capital management system, for example, needs to include thorough, extensive training on the solution itself so CFOs can get right to the data they need.
The Benefits of More Accurate Data
When CFOs have quick access to their companies' most accurate data, those companies reap the rewards.
Accurate data helps CFOs build effective strategies, leading to higher employee engagement and lower turnover rates. According to Gallup, only about 32% of employees in the U.S. are engaged in their work. More research from Gallup discovered that companies with scientific, experiment-verified development and performance strategies see substantially higher engagement than companies without them.
Better strategies also lead to increased profits. Transactional inefficiencies in processes like benefits administration and timecard inconsistencies reduce employee morale, taking up the time of both finance and HR workers. When those workers deal with fewer errors, they are free to dedicate their time toward more proactive pursuits, increasing profits instead of mitigating losses.
Improving these systems and keeping employee morale high can save companies millions in labor expenses. The cost to replace just 12 employees ranges from $250,000 to $1.5 million. By retaining just half of those employees, executives can save their companies hundreds of thousands while creating more positive, productive work environments.
Better reporting systems lead to more strategic decisions and stronger companies, but efficiency does not develop on its own. By following these four strategies, CFOs can rely on more effective systems to produce the most accurate data:
1. Increase Collaboration Between CFOs and HR Managers
Companies with strong links between HR managers and CFOs enjoy faster growth, higher earnings, and greater employee productivity, according to Ernst & Young. By using a centralized database, CFOs and HR managers can work together to generate more accurate reports and identify profit leaks. Leaders should implement a system that blends HR data with day-to-day financial data to create a unified center of information, which helps members of each side see the impact of their work on the other.
2. Identify Growth Opportunities
Employee data from HR tells CFOs where to focus first. Where are employees disengaged, when do they become disengaged, and how can executives close those gaps? CFOs can answer these questions through unified HR and financial data to cultivate stronger work environments. These insights lead to evidence about which candidates perform better, allowing recruiters to target more accurately while increasing employee engagement and retention. From there, companies will naturally see lower turnover, higher customer satisfaction, and higher profits — everything CFOs crave.
3. Create Self-Service Options
By implementing systems with self-service technology, CFOs can streamline delegation from executive to manager and from manager to employee. This allows CFOs to focus on higher-level tasks instead of the day-to-day worries an assistant or lower-level manager could easily handle. CFOs who spend less time on administrative tasks can spend more time evaluating data and executing better strategic plans, benefiting their companies on a larger scale.
4. Automate Workflows
CFOs who use their systems to automate basic tasks enjoy freedom from unnecessary manual processes that plague many others. Automated processes also reduce transactional inefficiencies, eliminating duplicate work and decreasing reporting errors. The more automated workflows CFOs can build into their reporting systems, the lower the risk of errors or penalties from noncompliance — and accurate data is the key to every CFO's process of making strategic decisions. Additionally, automated processes are easier to organically scale as a company grows.
The more efficient and accurate a company's reporting system, the more strategic decisions its CFO can make. Financial executives who follow these steps can better utilize their existing tools and create opportunities for their companies to flourish.