central south mid market CENTRAL SOUTH MID MARKET
OPPORTUNITY SEIZING THE
The future-fit FD
For the final part of its Central South Mid Market Campaign this year, accountants and business advisers BDO is partnering with CMA Recruitment Group in Southampton to discover just what it takes to be a successful FD
Innovative, ambitious companies at the forefront of developing new technologies, the UK’s mid-sized entrepreneurial businesses are engines for growth – thriving through internationalisation and employing millions of people.
However, rapid developments in technology and regulation, the growth of populist politics, an uncertain future relationship with the EU and opportunities for a whole raft of new trade deals across the globe means that many of the boundaries that once shaped the way organisations do business are changing or disappearing altogether. Against this backdrop, the role of the finance director is continuing to evolve, becoming ever more strategic, value-driven and future-focused.
The role of the finance director has always been based around three core areas:
• Adding value to the organisation’s decision-making and strategy through the preparation of budgets and plans based on assumptions and expectations about performance, the environment and key areas of risk
• Leading the process for the preparation of – and presenting the retrospective numbers for – management and statutory accounts
• Maintaining and improving the control systems that record and process financial data.
These fundamentals remain the same, but finance directors and chief financial officers (CFOs) increasingly deliver on a much wider range of priorities.
Malcolm Thixton, lead partner at BDO in Southampton, explains: “Today’s FD is expected to add value well beyond the traditional roles of cost management, controls and being the company’s ‘conscience’. They now often find themselves acting as the integration hub for key business processes and the driving force for business transformation, establishing robust risk management
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Richard Dibden and Malcolm Thixton
procedures and supporting the business to develop effective growth plans organically or through mergers and acquisitions, while remaining cost competitive.”
Reducing costs, improving efficiency and becoming a better partner to the business have always been important, but the finance function is now the catalyst for change across the business with regards to long-term performance, not just delivering short-term financial outcomes or one-off cost reductions.
Technology
Digital technology is currently changing the workplace in fundamental ways. The increasing availability of large and complex data provides both challenges and opportunities. The best FDs are already using technology to help collect, organise and standardise data in real time. Analytics are enabling greater insight and informing decision making across the business. The next generation of financial applications is predicted to revolutionise the finance function and we expect the FD/CFO to be at the centre of this.
As automation takes over many daily tasks, FDs and their finance teams will spend less time on recording and validating the
numbers, and more time making the data connections and explaining the financial implications to the business. This will provide more effective business intelligence for identifying new markets and other opportunities, measuring and managing performance.
Risk
One of the key challenges for the future-fit FD is risk management. Avoiding risks is not an option, so proactivity is the order of the day. Alongside their finance teams, FDs are better placed than anyone to assess both the risks and opportunities for the business and recommend the appropriate course of action. However, they can expect greater scrutiny on risk management processes and higher expectations from the board that longer-term financial plans are fit for purpose. Investors and other stakeholders will also look for greater assurances over the financial viability of the business’s strategy for delivering longer-term financial success and growth.
Regulation
Greater regulation will affect all parts of the business and the finance function will be in the spotlight. There will be an increasing
THE BUSINESS MAGAZINE – NOVEMBER 2017
BRAVE
INNOVATIVE
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