Cash & Liquidity ManagementCash ManagementCash Management RegionalFinancial leaders feel vulnerable

Financial leaders feel vulnerable

A Dun & Bradstreet study finds UK financial directors and CFOs believe their role has expanded - and with it the potential for error.

Modern day financial leaders are “a community under intense pressure to balance traditional accounting tasks with more strategic revenue-generating activities,” reports Dun & Bradstreet (D&B).

An independent study commissioned by the business insights group focuses on the complexities of the modern financial leader’s role and is based on a poll of 200 chief financial officers (CFOs) and financial directors across UK media and large enterprises conducted by independent researcher Censuswide.

Of the 200 surveyed, 71% said their finance teams are under too much pressure to be business protector and growth driver and 56% believe their board has unrealistic expectations.

Exploring the evolving nature of their role, almost all (97%) financial leaders surveyed say their responsibilities have changed over the past three years. Most pointed to a growing emphasis on strategic responsibility, with 59% revealing their job now includes more risk and compliance responsibilities.

“The role of the financial decision maker has transformed over the last few years and, while many (74%) financial leaders feel this has been a positive shift overall, it’s still a major challenge,” said Tim Vine, D&B’s head of trade credit for UK & Ireland. “Suddenly, teams who have reduced in size now have to manage a complex dual role – business gatekeeper and revenue creator.”

Yet despite their expanding role, 60% of respondents say their team has decreased in size over the past three years. As a result, 53% admit reduced resources increase the risk of serious mistakes being made. Fifty-nine per cent of respondents suggest their organisation sometimes rushes through the compliance process to support revenue-generating activity and 55% said they feel uncomfortable with the extent to which their business sometimes gambles on risk management.

Forty-five per cent of respondents believe data is “extremely important” to meet the expectations of their businesses, make smart decisions and forecasts and fulfil their roles effectively. The biggest data benefit cited by 43%: helping collate customer intelligence.

However, 57% of financial leaders admit their business lacks the ability to access accurate and current data. The biggest barriers respondents see are: a lack of skills (23%), lack of investment in technology (21%) and inaccurate data (20%). As a result, almost nearly two in three admit it’s difficult to find and capitalise on strategic opportunities.

“The UK’s financial leaders know how powerful data analysis and smart use of technology can be in helping them meet business expectations in their new joint role as business guardian and revenue driver,” said Vine. “Despite the challenges they clearly face, these two roles are not opposites.

“Protection and growth can go hand-in-hand, but only when they are underpinned and supported by the resource, tools and data to allow for smarter decisions that will grow the business. If financial leaders are to fulfil this duel objective, they must gain support for the data and analytical capabilities needed to empower their insight.”

 

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