Risk manager, innovator, consultant - the role of the finance team in 2023

Post-pandemic, finance teams may have expected a return to business as usual and to resume ‘normal’ practices. Yet, organisations have continued battling with the long-term implications of geo-political tensions, inflationary pressures, and the energy crisis, that look set to remain throughout 2023. 

In the face of this adversity, finance teams may be tempted to hunker down and focus on controlling cost and capital investment. Although this is an important piece of the puzzle, a sole focus on cutting costs will not be enough to protect margins going forward.  

As we move into the new year, the role of the finance team will continue to evolve, playing a central role in growth. Maintaining a focus on digitalisation and data, boosting resilience, adding value, and meeting ESG goals will be vital to support the entire organisation in remaining competitive in 2023 and beyond. 

Finance teams are becoming increasingly data orientated. For talent, this means attracting workers with different skillsets, such as data scientists and cybersecurity specialists, and retraining existing staff in digital skills. However, when it comes to technology, while roles are becoming more strategic and consultative, many finance teams are still stuck in traditional ways of working, combing over spreadsheets to plan annual budgets and develop multi-year strategies. 

To support finance to provide more value in 2023, there needs to be less time spent gathering and cleaning data, and more time available to scenario planning and strategic insight. This is where automation comes in. CFOs are recognising the value of consolidated data for planning, with teams able to work with more agility.  Financial close should be a matter of hours or days, using automation tools to accelerate and create a single view, instead of waiting weeks or months to close them. Too many teams still rely on spreadsheets, but they are after all, only as good as the person who created them.  Moving to a single view of data mitigates risk and enables more reliable and rapid scenario planning. 

With economic uncertainty expected throughout 2023, risk management, cost control and revenue protection will be essential for finance teams to support their C-suite. The volatility of the financial markets means that planning and forecasting processes need to be more agile to keep pace and manage risks effectively. Having the right tools in place to anticipate and plan for different assumptions about the scale of risk, will be vital for business continuity.  

In 2023, the focus should be on predictive analysis to pinpoint earlier warning signs and obtain insights on areas of risk. Consolidating data in a single platform allows finance professionals to plug and play different scenario planning models, enabling them to identify areas for mitigating action or to promote growth. This enhanced risk profiling can help the C-suite to select the best areas for new investment. 2023 is not a time to be risk averse – it’s a time to manage risk with more insight.  

Finance teams have used spreadsheets to bring data together for decades, but this can never be at the speed and scale we now see with modern enterprise resource planning (ERP) solutions. Now, the reach of finance teams extends beyond the books into non-financial datasets, creating a holistic view across the entire organisation. This puts finance professionals in a unique position to deliver broader, more informed insights and improved decision-making throughout the anticipated turbulence of 2023. 

With teams already attuned to the costing of people and investments and bringing operational information into the mix, it gives an even greater oversight of the end-to-end cost of each product or service. This provides the opportunity to dig into the drivers of cost within operations, so becoming more central to the C-suite conversation. This improved oversight moves the CFO from being the naysayer, to the go-getter – finding innovative methods to improve operations within the constraints of tightening resources. 

In 2023, finance teams must be equipped with the right tools to report effectively on ESG and look to embed analysis into their remit. Although it may have fallen down the list of priorities slightly as people focus more on cost control, managing inflation and handling working capital, it will continue to be a key attribute to develop stakeholder trust and drive shareholder investment. 

For instance in forecasting processes, 57% of finance professionals feel that their organisation considers non-financial objectives, such as sustainability and social factors, to some extent, with 24% saying that it affects them a great deal. Factors such as carbon emissions, workforce demographics and regulatory requirements should play a large role in budgeting and strategy, with ESG becoming as critical to the top line as the bottom line. 

As strategies and planning become more holistic and future-gazing, finance teams encounter a mindset shift from profit-driven, reactive short-term decisions to projecting what steps need to be taken to achieve net-zero, hit people targets and ensure compliance. This will require collective buy-in across the organisation, yet the finance team is crucial to tracking progress towards targets, identifying areas of improvement and meeting reporting standards. 

Moving into another year of uncertainty, finance teams need to position themselves as strategic advisors to their organisations. Their role is multi-layered, acting as financial controller, risk manager, consultant and innovator, improving efficiency and performance but not at the expense of social responsibility