Economics & Finance
Following recent accounting scandals and a more competitive business environment, many CFOs and the finance groups they manage have begun to take on new strategic roles inside the corporation. They want to enforce tougher control mechanisms to ensure legal and regulatory compliance, provide strategic insights into the internal and external business environment, and use performance tracking to connect the business strategy with day-to-day operations.
The responses of participants in recent APQC surveys support the trend toward a more strategic role. Three years down the road, respondents said they would spend 30% more time on decision support and management. However, these responders have not made much headway toward a more strategic role, according to the same studies. APQC reports that finance organisations of all sizes spend over two-thirds of their time on transaction processing and controls and barely one-third on decision support and management.
Fig.1. The Role of Finance and Financial Manager
To take a more strategic approach to finance, one global consumer goods corporation followed the following method. The corporation built a more effective cash management, accounts payable, and accounts receivable group of functions in its global operations in the first step, based on improved information transparency. The company developed “straight-through processing” at every level of the finance function in the second step, leveraging its global reach to maximise cash management efficiency, foreign-exchange exposure, and the global supply chain to help fund growth, participate in new marketing and distribution arrangements, and comply with international regulations.