What challenges could finance directors face in 2019?
The start of a new year always brings a fresh set of challenges for finance directors and CFOs.
But, with Brexit looming, this year could prove to be particularly difficult for those in the UK. Here are some challenges UK CFOs and finance directors could face in 2019:
1. Exploring new mediums for growth
With Brexit around the corner, UK based companies may lose their ability to attract investment. Experts such as the CBI Director general have already confirmed that businesses have seen a loss in investment because of Brexit.
If foreign investment stops coming into the UK, it will heavily impact the growth of UK businesses.
As a result, finance directors are already putting their heads together looking for platforms from which they can extract further growth and profitability.
For example, one consideration floating around is the investment in automation and artificial intelligence.
2. Transparency in operations
With reduced funding options in the UK, CFOs may need to re-evaluate credit risk and take the necessary measures to control their capital cost.
Specifically, three factors chief finance officers and finance directors need to focus on include:
- Controlling their spending
- Managing working capital
- Increasing sources of liquidity
Obviously, all options must be assessed in terms of how they will affect business growth. Clear communication should be maintained with stakeholders and funders to seek assistance.
3. Skills and technology for finance teams
Understanding the role of technological innovation in today’s corporate world is becoming increasingly important.
That’s why CFOs and FDs need to introduce the latest tools and technology. This will enable them to produce insights and analysis in line with the rest of the world.
In addition to technology, finance teams also need to realise that in order to survive in the ever-evolving working environment, they need to develop more than just the basic accounting skills.
Learning relationship management, strong communication, and strong strategic thinking are now becoming almost as important as the traditional technical and financial skills and expertise.
4. Hiring the right personnel
In 2019, the need for hiring the right resource within the finance team will be more crucial than ever.
Organisations won’t just need people who are well equipped with traditional financial tools; they will also require resources that can easily adapt to the new skill sets as mentioned earlier.
Almost every 3 in 5 CFOs and FDs agree that they are facing issues in finding the right financial leaders.
Finance executives also demand a higher pay if they are good at their work, which may be an issue for the public sector due to austerity measures.
Some companies don’t have the budget to hire top leaders with relevant finance and accounting experience so they are now concentrating on training their own managers.
Plenty of in-house training is provided to the finance managers and executives, preparing them to take responsibilities and to become the future leaders for their companies.
5. Embracing digital tools
How data is interpreted is changing globally, and this is something some financial directors of businesses in the UK would seriously need to work upon.
For those that aren't already doing this, they need to understand the importance of the role that correct analysis of big data plays in precise forecasting, risk management, and assessment of values.
This means that CFOs and FDs need to get acquainted not just with the outputs, but also with the input.
The field of finance as a whole has also profited from the advancement of technology. Now reports can be created quickly, which helps teams in quick and efficient auditing.
Selecting the right digital tools is important. Many government projects have failed because of ill-managed procurements and programmes. Finance Directors must ensure that they are not just introducing any technology in their organisation but also focus on effective technology, which gives precise analysis.
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Date Posted: February 9th 2019
Posted By: Phil Scott