Why CFOs will need to step up in 2024

Another new year is upon us and all signs suggest it could be a challenging one, economically. High inflation and rising interest rates look set to continue dampening demand – so much so that the RBA has forecast GDP growth of just 1.75 per cent for the 2024 financial year.

Business confidence is at its lowest level since 2012 (outside of the COVID-19 period), with key consumer-facing sectors – retail, recreation and personal services – particularly hard hit, according to NAB’s Monthly Business Survey November 2023.

Against that backdrop, businesses of all stripes and sizes will need to work harder than ever to shore up margins and sales and identify opportunities to grow profitably.

Finance and accounting professionals, and the finance function, will be integral to the success of those endeavours.

Here are some of the trends we can expect to see play out in 2024.

Tighter ties with the business

The days when finance and accounting were viewed as a back-office function – an essential but low-profile area of operations – are receding fast. Instead, there’s a growing perception that finance needs to be deeply connected with the business proper. Leadership teams are looking for expert input and advice to inform key decisions on all aspects of operations and it’s on CFOs and their teams to deliver it.

For finance departments that haven’t already made the shift, 2024 is shaping up to be the year for getting out of the numbers and diving into the business.

Tackling transformation

Doing so requires finance professionals to access and interpret up-to-the-minute data. That’s a challenging proposition, in the absence of the right technology. Namely, cloud-based continuous accounting software that allows businesses to stay on top of their financial position on a day-to-day basis, and analytics and modelling tools that make it possible to mine the resultant data for salient insights.

Hold-outs that have yet to swap legacy manual methods for modern, digital alternatives are increasingly finding their old-school programs and processes a significant impediment. The next 12 months are likely to see them – finally! – doing something about it.

Reimagining processes

Best practice finance transformation looks to do much more than merely swapping out old software for new. It’s an opportunity for finance departments to re-imagine their processes; exchanging clunky manual workflows for automated, streamlined alternatives.

BlackLine research shows this is a priority for Australian CFOs who know things can, and should be, done smarter, faster and better – and that they’re committed to making it happen when they make the switch.

Exploring AI

AI is not a new development but it’s rapidly becoming more powerful and pervasive. Organisations around the country are grappling with two questions: how best to incorporate AI into their operations, and how much to rely on the outputs generated by AI models.

Courtesy of their specialist analytical skills, finance professionals are ideally positioned to become internal strategic advisers to their commercial unit colleagues. Expect to see them charged with validating those outputs on a project-by-project basis, as the year goes on.

Upskilling teams

Latest-generation finance technology is of little use in the absence of skilled professionals who understand what it’s capable of and know how to use it. Currently, knowledge levels vary considerably across the industry, both technologically and professionally. Finance leaders believe they’re dealing with a significant skills deficit: more than two-thirds of those surveyed by BlackLine in late 2023 felt their organisations did not have enough team members with the deep technical knowledge needed to resolve complex accounting issues.

Identifying and acting on opportunities to remedy that deficit will be an urgent imperative in 2024.

Retaining top talent

So will attracting fresh talent, in the face of what CPA Australia has previously described as a critical shortage. Recent years have seen young people loath to enter the profession; less than enamoured by the prospect of a career spent completing the tedious manual tasks that have historically been the accountant’s lot.

There’s also evidence to suggest that the finance tools and technologies in use within an organisation can affect its attractiveness, or otherwise, as an employer, with early career professionals avoiding those that run on obsolete technology.

Hence, businesses that don’t want to find themselves chronically short of key resources will be taking steps to ensure they don’t fall into the dinosaur category. This means upgrading their technology stacks and ensuring recruits are afforded ample opportunity to immerse themselves in challenging and rewarding work.

Rosie Cairnes is regional vice-president ANZ at BlackLine.