At the beginning of the new year, the time is right to assess where your company is going and examine strategic initiatives. It’s also a terrific time to put a plan together to see what resources would be required to bring those initiatives to fruition. It’s also time to ask a lot of questions to determine which plans are “pie in the sky” dreams, and which plans are in realistic alignment with the company’s long-term goals.
Bridgepoint Consulting has offered the following sample questions to help CFOs put the right talent, technology and resources in place for the new year. These questions will get you moving in the right direction.
1. Do you have the right financial growth plan for the coming year?
Most companies are already well down the path of financial planning for the upcoming year, but as the year kicks off, a reminder never hurts. An ideal budget forecast is built from the bottom up – not mandated by the CEO/CFO – with a strong go-to-market perspective that factors in all the elements necessary to bring new or expanded products and services to market. A robust financial growth plan should be both strategic and operational: tied into the organization’s long-term goals, but granular enough to make sure everything makes sense and is achievable. Such breakdowns typically include not only yearly numbers, but monthly or quarterly milestones as well.
2. Have you begun assessing the impact of Revenue Recognition and Lease Accounting?
The new revenue recognition standard is one of the most far-reaching accounting policy changes in recent history, and following hot on its heels is the complex new lease accounting standard. Together, these two changes may have a monumental impact on your business, which is why you should begin focusing on them sooner rather than later.
3. Have you buttoned up your IT security?
In many cases, the IT function reports to the CFO, and we are hearing from our conversations with boards that they are becoming more and more concerned about IT security issues. And if you already have a significant presence in the cloud, make it a priority this year to review and update your risk management strategy so that you can move with confidence along your path to digital transformation.
4. Have you identified changes or upgrades you need to make?
Speaking of digital transformation, the beginning of the year is also an excellent time to take a strategic look at your company’s approach to digital technology. To the extent that any IT system changes are anticipated for 2018, you need a thorough plan for their implementation – and sufficient lead time for those efforts. Many organizations have made the mistake of thinking ERP or CRM upgrades can be tackled over a long weekend, when the reality is that these projects can take three months or more to complete and can easily spin out of control, taking budgets with them. Our advice is to start planning now – and to make sure your upgrade budget is incorporated into your financial growth plan.
5. Have you put a plan in place to retain high-quality talent?
Here’s something we have seen demonstrated time and time again: It is far easier to keep really good people than to lose them and be forced to hire more good people. Replacing good people can be expensive. The SHRM Foundation suggests that when you factor in severance, productivity and recruitment costs, the true cost of replacing an employee can be as much as two times their annual salary. Do you have an environment that encourages innovation, leadership and teamwork? Do your people feel that they make a difference in the success of your company? Your compensation package may be part of what attracts great employees, but creating a culture in which people are valued and engaged will keep them excited about coming to work and helping your company achieve its business objectives.
Don Mal, CEO and co-founder of Vena Solutions identifies some additional ways that finance will further impact the C-Suite in 2018, as noted in Accounting Today (each link will provide additional details for each point):
- It’s time to go beyond just record-keeping
- Spearheading the adoption of analytics
- Bringing In More Non-Financial Data For A More Holistic Look
- Leading the C-Suite on long-term and predictive-based decisions
- Providing new and better insight into what drives revenues
- Evolving from data collection to storyteller role
In conclusion, the overriding concept is adequate planning. Have the right questions been asked? Is the plan well thought out and consistent with the company’s long-term strategic plans? Have planning decisions been under-taken by group?
This is the mindset needed to move the company in fruitful directions, and asking practical, pointed questions can help you act in immediate and effective ways.