By Daniel Ball, Business Development Director,Wax Digital

Amid a backdrop of uncertain economic conditions, today’s Chief Finance Officer (CFO) is frequently tasked with navigating the impact of both internal and external pressures often outside of their control. According to ICAS, the professional body of chartered accountants, cost control is keeping finance professionals awake at night more than anything else, closely followed by growing revenues and then recruitment and retention.Mitigating against business risk is also another factor on the CFO’s radar.

If finance professionals fail to get their internal house in order, on matters such as cost management, growth, risk management and staffing, they will have less time to focus on strategy and forward planning in often difficult and changing markets.

To combat these internal challenges finance must consider how they can become more collaborative by building internal supportive relationships, rather than operating independently. And finance’s relationships with other teams, procurement being one example, can potentially hold the key to solving these internal pressures:

1. Cost control

Cost control frequently tops the list for CFOs as it counters against the risk of weaker than anticipated growth. Spend management across the business is an essential part of cost control and it’s here that collaboration with procurement can help finance professionals.

Controlling spend is a challenge for most organisations unless it is managed effectively. For example, out of budget purchasing has the potential to cause serious cost issues for any type of business, regardless of their financial situation. However, cost control through spend management is a key part of procurement’s remit and it’s their job to set and enforce procurement guidelines on price and supplier choice. However, despite these tight spend regulations,now and again, individuals will circumvent the process and set up their own supplier relationships, therefore, undermining the whole spend management process.

Finance can work with procurement to eliminate unregulated spend. Some procurement teams will use spend analysis tools to help them pool data into meaningful analysis, helping them spot any anomalies and devise a plan to put a stop to it. In fact, eProcurement tools can help organisations gain better visibility across all spend and help procurement to realise buying power in different spend categories – all contributing to improved cost control.

Successful spend strategies depend on good data, structured processes and insightful analytics and one of the CFO’s key challenges is their ability to harness data and use it to power effective decision making.  Procurement can help finance here too as its historical spend data can empower the business to increase savings and boost organisational efficiencies.

The CFO should also back procurements’ efforts to encourage a culture of purchasing accountability in the business where all departments are made responsible for their own spending. Each department manager should be aware of what his or her team is purchasing, what they are spending it on and who they are buying it from, all against pre-agreed budgets.

2. Mitigating business risk

From financial compliance through to understanding the wider threats to the business, risk management has increasingly become the responsibility of the CFO. According to Deloitte’s second-quarter 2018 CFO Signals report, 55% of CFOs said that they are responsible for their company’s enterprise risk management.

Supplier risk is a growing threat to businesses. The collapse of Carillion and uncertainty over trade conditions has seen procurement take sensible steps to gain better visibility and understanding of the supply chain and improve supplier relationship management (SRM). Today’s supply chains have become increasingly complex and increased visibility is required so that danger signs can be identified before a situation escalates causing disruption.

Today’s forward-thinking organisations are using SRM software to source suppliers, communicate with them more effectively and to carefully monitor contracts. This level of risk management comes as welcome relief to CFOs, who are reassured that the wider business is doing everything it can to manage potential risk from suppliers.

3. Staff retention

Wax Digital’s research has shown how the repetitive and laborious task of manual invoice processing puts significant strain on finance teams, which in turn,takes its toll on job performance and satisfaction.

The research showed that finance professionals are concerned about the impact of manual invoice management. It’s not only time consuming from an operational efficiency perspective, but it’s damaging impact on staff morale could be a contributory factor to them wanting to leave. In fact, over 60% of AP clerks stated that processing invoices is the task they hate the most, with the majority claiming they find the job lengthy, tedious and frustrating.

However, eProcurement software is helping many organisations eliminate these slow, laborious, error prone financial tasks – including invoice processing – from their daily routines by fully automating it.The procure to pay process accounts for nearly one third of the overall cost of finance and procurement operations. Taking advantage of software helps remove this tedious task from the finance team, freeing them up to do other more meaningful jobs with the potential to lead to greater job satisfaction.

There’s a lot to be gained from a more collaborative approach to business challenges by the CFO. Feeding into many of its key concerns, procurement is well placed to contribute to cost control, supplier risk, and the tools it uses can also save the finance teams hours of monotonous data-entry time having a positive impact on recruitment and staff retention.Improved internal collaboration with other business functions such as procurement and being open to new ideas on working together could be the key to helping CFOs sleep better at night.