Letter to CFO

Letter to CFO

Dear CFO,

2022 has in many ways been a challenging year, forcing us to adapt our work to keep up with what is going on in the world. A war, inflation, and an apparent recession is leveling up the expectations on the financial department. Today, the CFO not only needs to report the collected numbers; you are expected to lead the organization ahead by predicting likely outcomes, challenges, and financial opportunities.

In many ways 2023 looks demanding, in other ways bright. I want to share with you the challenges and opportunities that I envisage, and how I believe the CFO can prepare for what is coming.

First of all, it is obvious that reactive work is a thing of the past. In an uncertain market as the one that we are facing, you even need to think beyond proactive work and ensure that you actively monitor, evaluate, and are prepared to update your existing forecasts monthly, if not more often.

The price increase that we see today will follow us into the next year. Cost control is, and will always be, key, starting with reviewing the organization seen to staff and salaries, tools, and programs to identify unnecessary costs. Negotiate rents. Review your own costs and adjust prices to keep up with the market. Discuss your interest rate with the bank and seek a third-party lender to prepare for worst case scenario. When profits decrease, never lose track of the cash flow, and make sure to create a buffer now, before the crisis hits.

I believe that correct usage of the data will play an important role in 2023 and the biggest mistake will be to be too optimistic in budgeting. Today’s CFO can not only conclude numbers; new prognoses need to be set and monitored closely. Never delay reporting: by ensuring that work is recorded directly and correctly, a CFO does her- or himself a great service and simplifies the future for the department. Draw conclusions from your numbers, make sure to actively work on efficiencies and use data analysis to streamline the organization. By freeing up time to look forward, you get the opportunity to even get ahead of the competition.

In conclusion, the CFO will have work to do in 2023. An unpredictable future requires one strategy for the challenging scenario and another for the positive one. Things can turn quickly and when they do, it’s important not to forget to have a growth plan in place. By keeping up with the swinging trends, analyzing the market ahead and setting up a sustainable forecast with the team, you will be prepared when being encountered by whatever comes.