5 ways that CFOs create value in their organisation

5 ways that CFOs create value in their organisation

The role of a CFO is a highly prized one and one that carries significant cache within any company. It is one of the few positions that cover a broad scope of responsibilities both at a strategic level and within the lower day-to-day perspectives of running the FP&A activities. As such, a CFO’s focus can easily slide if they don’t have a clear understanding of what the priorities are and how they’re driving real value in the company.

In this article, we’re going to explore 5 key ways that CFOs create value – and how the various Apliqo solutions can accelerate them.

1. Strategic financial planning

CFOs head up a crucially important part of long-term business success and that is financial planning. They are tasked with crafting strategies that are aligned to company goals and objectives, but are grounded in the financial realities of the company itself and the ecosystem that it operates in. By assessing market trends, economic forecasts, and internal financial data, CFOs aim to create robust plans that guide how an organisation moves forward.

The real value comes from the fact that a CFO can integrate complex financial data with the strategic planning that is being discussed at the executive level. By mixing the two perspectives, a CFO crafts a clear roadmap that is achievable and within the risk mandates that the company is willing to accept. This is where Apliqo FPM really comes into its own – because it provides a single platform for all this strategic analysis to be completed. The tool unifies all the relevant financial information and when you layer on the visualisation capabilities of Apliqo UX, a CFO has all the tools they need to execute the sorts of planning activities that takes the company forward. 

2. Capital structure optimisation

The CFO is the person who helps to determine the optimal mix of debt, equity, and internal financing that is required to achieve the stated company goals. Their role is to minimise costs, maximise flexibility, and build a capital structure that can serve the company over the long term. To do this, a CFO must evaluate interest rates, market conditions, and risk tolerance – in order to find and negotiate the best-suited financing options for the key projects.

A CFO can leverage Apliqo CC to consolidate the group’s balance sheet structure and get a holistic picture of the entire entity before using Apliqo FPM to run different scenarios that assist with choosing between different capital decisions. Small optimisations here can have significant financial consequences while also impacting the way that the company is set up to make large investments in the future. 

3. Financial risk management

Another important role that the CFO plays is to manage the financial risk being taken on by the organisation. They must balance various credit, market, supplier, and operational risks and implement frameworks that ensure that the company is never over-stretching beyond its risk appetite. Typically, the CFO will look to hedge financial risks where possible and install controls and procedures to mitigate operational risk where there isn’t an external market solution.

Once again, Apliqo FPM is invaluable here as it allows the CFO to track key metrics that relate to financial risks of all kinds, and run them in different scenarios to evaluate their robustness over time. When done well, the CFO helps to safeguard the company’s financial health, providing crucial stability in times of uncertainty.

 4. Performance management

There’s a common truism in business, first espoused by Peter Drucker, that says “what gets measured, gets managed”.  This principle underlies so much of modern business building and the entire realm of performance management is grounded in this premise. Companies will identify what goals they’re trying to hit, and they’ll tie all the incentives to those objectives in order to align everyone to the same trajectory. The CFO plays a crucial role here in establishing the tracking the key metrics that denote performance, and reporting on them to the board and other stakeholders.

This is an art and a science and it requires analytical skills, a holistic understanding of what makes that particular business tick, and technology that can assist with data collection, processing, and visualisation. We recommend Apliqo FPM because of its sophistication regarding operational management and performance, as well as Apliqo UX which can provide highly compelling visualisations which help to engage staff members and other stakeholders with the incentives that are in place.  When this is done well, it adds a lot of value to the organisation because it grounds progress in data rather than anecdote, helping everyone to stay locked into the mission.

5. Investor relations and fundraising

As a company grows and scales, its ability to fundraise becomes more and more important in terms of securing the capital needed to execute on key strategies. In order to raise money, the CFO must lead the charge towards crafting a highly investable case for the company that shows sustainable growth potential, defendable margins, willing customers, and a range of other factors – both financial and operational.

The storytelling here can really make the difference in terms of the availability of funds and the cost of capital – all of which can radically alter the return on investment both internally and for those who are investing externally. Apliqo UX-powered Apliqo FPM is the perfect tool for this because it allows for tremendous reporting and visualisation capacity – all of which can be standardised across the organisation and shared with relevant investors along the way.

How Apliqo can help

These five pillars are just a small subset of what a CFO does and that just shows how wide-ranging the role actually is. There are few positions in an organisation that are so multi-faceted, requiring different sets of skills and perspectives to come together and align in order to perform well.

Simply put, the CFO cannot do this all on their own. They rely on a sophisticated technology stack that sits at the foundation of their accounting and finance systems and enables all these higher-value tasks to be completed at the right standard. IBM Planning Analytics / TM1 is the gold standard in this regard, and here at Apliqo we build layers on top of this tool to help CFOs get the most out of their data.

Apliqo’s suite of solutions, as we’ve detailed above, helps to unify the planning and analytics functions, making reporting and analysis easier than ever before. The CFO can focus instead on the key insights that matter and use those to drive decision-making in all of these different contexts.

If you’re looking for a way to transform your FP&A workflows, look no further than Apliqo. Get in touch today and let’s show you how you can liberate your CFO and allow them to flourish in a data-driven hub that is built for future success.

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