Blog > The Ultimate 2021 Guide for Every CFO | 9 Expert Opinions

The Ultimate 2021 Guide for Every CFO | 9 Expert Opinions

By |Published On: January 11th, 2021|

As businesses prepare to head into a new year, it’s no secret that each industry experienced dramatic changes in 2020. As Chief Financial Officers adjust their strategies and finances to meet new trends, we brought in nine finance experts to highlight the top focuses of 2021.

With the valuable input of these experts, this comprehensive guide will serve as great reference to assist CFOs during the planning process. These insights also emphasize the ever-changing role of the CFO and what this position can expect moving forward.

Originally, the role of a CFO focused on the technical side of company finances — investor relations, management reporting, and controllership and compliance. Today, the modern CFO goes beyond numbers to be a leader and business partner who aids in decision-making, growth initiatives, finance-focused strategy, internal and external controls, and more.

With new responsibilities and a new year in sight, CFOs can build comprehensive plans to align brand needs with the needs of consumers, stakeholders, teams, and industries. To help assist with this planning, our experts narrowed down 10 strategies for your business to implement.

Here are 10 essential strategies industry experts believe will drive success in 2021:

  1. Invest in customer value
  2. Mitigating risk for increased reward
  3. Capitalize during COVID-19
  4. Utilize software automation for greater ROI
  5. Allocate Capital to High-Priority Projects
  6. Improve project management to execute goals
  7. Preserve business strategies to increase cash flow
  8. Defend spending for growth opportunities and competitive advantage
  9. Implement company-wide cost-saving procedures
  10. Provide diverse resources to meet diverse budgets

Let’s get into it!

Invest in customer value

“The availability and adoption of technology, and its impact on improvements in efficiency and competitive advantage, mean your time will be spent working on how technology can improve your organization’s overall performance, rather than handling the administrative details.”


Daniel Penzing
Co-Founder of Maze of Our Lives

Providing value to your customers and improving brand perception is key to increasing profitability in the long run. As a CFO, it’s your responsibility to ensure your business implements effective strategies to appeal to targeted consumers. Building a reputation of trust, transparency, and credibility is crucial for your business, especially during times of economic downturn.

According to SuperOffice, customer experience will be the top priority for businesses for the next 5 years, as 86% of buyers say they will pay more for a better experience. CFOs can improve customer value by using three creative, cost-effective tactics:

  • Digital transformation
  • Consumer privacy and business protection
  • Product and service adjustments

Digital transformation

According to Gartner, post-pandemic recovery will be focused on rapid digital transformation, with an emphasis on reallocating resources rather than the conventional method of cost-cutting.

Digitalization offers a cost-friendly solution to connect with and appeal to target customers through marketing tactics like social media, email, online ads, and content for SEO. CFOs can use this approach to increase brand value and sales at a low cost.

Digitalization offers a cost-friendly solution to connect with and appeal to target customers through marketing tactics like social media, email, online ads, and content for SEO.

SEO is an increasingly important aspect of businesses budgets

Website optimization is also essential to ensure your page is user-friendly, easy to navigate, and visually appealing. A professional site represents a professional business presence.

CFOs should allocate funds for digital transformation to provide a valuable experience and informative content to targeted consumers, which in turn can yield higher profit and longevity.

Consumer privacy and business protection

Consumers will naturally be drawn to brands they trust to provide both valuable products or services and protective measures for sensitive information.

As more businesses transition online, it’s especially important for businesses to update their technology to ensure maximum defense against fraud and other threats. CFOs can meet customer and company needs by investing in necessary safety tools and resources.

With the pandemic pushing many businesses to remote work, phishing attempts are on the rise, leading 83% of CFOs to become more conscious of cybersecurity. Many CFOs now play an active role in defining protective measures for sensitive data and collaborate with CISOs to analyze the performance and productivity of their systems to determine their effectiveness and spending needs.

Investing in cybersecurity has become mandatory to protect customers, assets, and private information, and these security measures will add to both customer value and a positive reputation.

Product and service adjustments

CFOs who encourage adjustments to products and services to meet current trends, spending habits, behavior, and more, can improve customer value by relating more to consumer needs.

According to Deloitte’s 2020 Q3 survey, 28% of CFOs include investing in new products and services or expanding into new markets as one of their top priorities in the next 12 months. Customers appreciate businesses that listen to their needs, and this appreciation can result in new sales, return customers, future visitors, and improved brand reputation.

Nearly 62% of CFOs don’t expect demand to recover to pre-pandemic levels until Q2 2021. During economic downturns such as this, businesses can actually benefit from lowering prices because it shows customers their commitment to bringing value to them even during difficult times.

What is the top priority for your business in the next 5 years?

Mitigating risk for increased reward

“My favorite tool to grow revenue and EBITDA while mitigating risk is scenario planning. Any plans requiring an investment of more than $250,000 require two or three execution options with a budget for best case, worst case, and most likely case. Discussing the alternatives brings tremendous value in really understanding growth opportunity vs. risks, so we never have more than three initiatives at once and only the very best ones get our approval.”


Rob Hagen
CFO of United Scope LLC

It’s the CFO’s job to compile and evaluate financial data to forecast which growth opportunities will yield the most reward with minimal risk. Risk management is vital to determine how to increase profitability, ROI, and sales for your business.

When evaluating risks, it’s important to consider both financial- and performance-related components. The CFO should act as a steward of company assets, especially during a health crisis. The current pandemic serves as a good reminder to take every possible risk into consideration and plan accordingly for all scenarios.

When evaluating risks, it’s important to consider both financial- and performance-related components

An effective risk management program spans across all departments and ensures regular company-wide processes remain cohesive. CFOs should also evaluate insurance and finances to implement the best strategic, financial, and operational response to any loss.

To prevent this loss, businesses can try to address risks early on by analyzing current trends, future forecasts, and company insights.

To mitigate as much risk as possible, CFOs can revisit previous forecasts to evaluate past risk levels and make informed decisions for the future. Businesses can then address any threats such as loss of profit, data security, product malfunctions, resource deficiencies, and more.

In order to address threats, it’s important for businesses to know which concerns are the greatest. PwC’s Pulse survey displays CFOs’ top risk concerns for 2021 and beyond:

  • Policy/regulatory risks: 67%
  • Environmental: 46%
  • Compliance: 44%
  • Macroeconomic: 43%
  • Cybersecurity: 36%

Additional concerns include skills shortage, workplace safety, liquidity and solvency, third-party disruption, brand/reputational damage, and fraud.

By building risk mitigation plans to address all threats, CFOs can position their company for better recovery, profitability, and increased rewards after the pandemic.

 

Capitalize during COVID-19

“With the pandemic’s unknown end date and impact on future revenues, it will be critical to react quickly to any downward trends in revenue by controlling and/or cutting overhead costs.”


Kevin Irwin
Director of Finance Century Business Solutions

With the pandemic creating stress for companies on a global scale, CFOs have had to continuously adapt their business initiatives to a rapidly changing economic climate. Businesses have reassessed how they operate, spend, and strategize, and CFOs have developed future contingency plans.

CFOs can continue to capitalize during the COVID-19 crisis using several strategies:

  1. Team communication and collaboration
  2. Operational and product improvements
  3. Increase outsourcing and automation
  4. Leverage liquidity
  5. Nurture stakeholder and investor relations

Team communication and collaboration

With remote work reaching unprecedented levels, CFOs should listen to and provide for the needs of their staff. In doing so, they can ensure protocols, procedures, and strategic planning remain cohesive despite uncontrollable factors.

Remote work does not seem to be going anywhere. Gartner suggests that 74% of surveyed CFOs intend to move at least 5% of their employees permanently remote.

With teams missing out on in-person communication, it’s crucial for leaders to boost company morale and maintain a strong sense of culture. By fostering a positive community, CFOs can improve overall productivity, which can impact product and service profitability in the long run.

CFOs can succeed with virtual communication and collaboration by incorporating goal-driven meetings, regular individual check-ins, team projects, support networks, and more. Remember, the goal is to retain talent — don’t micromanage, respect boundaries, and focus on well-being.

In addition to increased productivity, all of these tactics can contribute to increased sales, innovation, and growth in 2021.

Operational and product improvements

As the pandemic continues to require adjustments to business models for 2021, CFOs can adapt by tailoring operations and products for various scenarios.

Instead of forecasting based on financial data, CFOs can implement scenario planning. This approach still focuses on revenue and cash flow initiatives but also includes various situational courses of action. It may be beneficial to implement a multi-department team to take on scenario planning to address any obstacles that may arise in different areas of your business.

Businesses can also use capital expenditure models to evaluate investments to improve sales and gain an advantage over competitors.

Even during times of crisis and recession, high-performing companies produce new products and take advantage of growth opportunities. To target relevant products to meet current needs, CFOs should evaluate costs, pricing, and supply chain structure.

Being selective in which products and services you sell, develop, and market for the foreseeable future will determine how much or little your business will grow — research and development will help you analyze benefits, spending, and potential profitability to decide which to choose.

Increase outsourcing and automation

During times of economic uncertainty, it’s normal for CFOs to reduce costs, streamline functions, and increase savings to capitalize on future opportunities. Using both outsourced and automated processes can help.

Virtual data centers, cloud-based interfaces, and third-party financial services can all be useful for businesses seeking to increase outsourcing and automation.

Although CFOs continue to tap into virtual employment and automation, these options still haven’t reached their full potential. Only 27% of surveyed executives say at least 1 in 5 members of their finance teams are virtual, while 52% say automating manual processes is a high priority. These figures indicate the large margin of growth businesses can capitalize on to save time and money using automation.

Leverage liquidity

To ensure a business has the means to support operations, CFOs must prioritize liquidity during economic declines. Managing liquidity helps cut costs and maximize profits. Businesses can optimize assets and yield profitability by balancing short-term credit, cash, and performance needs.

Despite fluctuating finances and stock markets, CFOs can secure liquidity by leveraging tax planning, diversifying or securing new lines of credit, modeling cash flow, and more.

Nurture stakeholder and investor relations

Retaining stakeholder and investor relations during times of uncertainty is crucial — these connections can help businesses allocate more resources to new business ventures in 2021. To achieve this goal, CFOs should communicate on a weekly or even daily basis with executive leaders, board members, banks, private equity investors, and employees.

An EY Parthenon survey suggests that CFOs should shift their strategy to focus on all stakeholders, not just shareholders — 78% of executives say regulatory stakeholders are as important or more important than shareholders in financial services.

After identifying key stakeholders and investors, CFOs should provide them with information about the steps they’re taking to address the crisis. This information will not only serve the stakeholders’ needs but will demonstrate how the CFO is working to improve financial performance.SEC and PCAOB regulators have adjusted guidelines regarding financial reporting and disclosures to provide relief for issuers, investment advisers, and funds that may have been affected by the pandemic. Businesses should stay up to date on all policies and regularly communicate with these regulators for guidance. SEC deadlines could also affect registrants’ financial reporting. CFOs must be transparent about financial reporting, as it can affect business development, legal issues, and risk factors.

In response to the COVID-19 pandemic, what were the CFO and finance functions' most immediate priorities?

Utilize software automation for greater ROI

“The availability and adoption of technology, and its impact on improvements in efficiency and competitive advantage, mean your time will be spent working on how technology can improve your organization’s overall performance, rather than handling the administrative details.”


Brooke Lively
Founder & President of Cathedral Capital

As technology continues to expand its reach, software automation has become nearly essential for growing businesses. Tedious back-office duties can now be automated through ERP systems, allowing your team to improve time management. Streamlining operations can help CFOs and finance teams be more efficient, productive, and accurate.

COVID-19 exposed deficiencies in many business models, especially digital processes regarding accounting and finances. According to a 2020 Deloitte survey, roughly 60% of CFOs say their investments in information technology for virtual and automated business