Risk management, cash management: what challenges for CFOs in 2020?
While the finance function retains its traditional missions, such as fighting fraud or adapting to market movements, the mission of CFOs is tending to diversify. Indeed, the themes of compliance, cyber security, data protection and risk management in general are becoming increasingly important in the work of CFOs. You will find this theme in our technological innovation file.
Strategy FINANCE
The role of the finance department in risk prevention
Today, risk management is an essential issue for all strategic departments of the company. Thus, the finance department must ensure that cash is properly managed. This is the top priority for most companies, ahead of investment. The financial impact of major strategic decisions is systematically and accurately measured. In addition, internal audits must be organized regularly to anticipate and manage risks. If necessary, they can be outsourced, in order to ensure objectivity.
Moreover, the development of compliance also impacts the financial departments. It requires, first of all, compliance with the regulations in force, it being understood that heavy financial penalties are sometimes provided for in case of failure, for example with regard to the application of the RGPD. But compliance is also understood in a broader sense. Taking into account the major social, environmental and societal issues is a challenge for finance departments. Investment in virtuous practices(CSR, green finance, etc.) should not be neglected. The company’s image and reputation are at stake.
The definition of internal preventive procedures
CFOs are actively involved in the development of an enterprise-wide risk map. In particular, they carry out an impact study for each project to be carried out, as well as for any digitization project. They also initiate the necessary controls. They help define effective internal procedures and raise the awareness of the employees concerned.
Particular attention must be paid to the means available to automate internal controls, particularly through the use of new technologies. While digital transformation offers particularly effective tools for risk management, the human factor continues to play an essential role. Sometimes, theautomation of procedures goes hand in hand with a decrease in the vigilance of the actors involved.
This difficulty can be overcome by implementing a real risk management policy. It would also be risky to respond to a strictly accounting approach aimed at reducing costs related to the execution of audits and internal controls, or to the necessary training of personnel.
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Also read in our “Finance ERP project” file:
- What are the major challenges facing CIOs today?
- Transformation of the finance function: what roles for the CFO and DSI?
- IT department: how to support the finance department?
- Optimize the management of administrative processes with an ERP solution
- How to evolve your company’s financial information system?
- Why do cloud ERP’s tend to continue to grow?
- Big data, data management, data analytics and ERP: what are we talking about?
- ERP finance: how to ensure data security?
- What financial reporting tools are available to DAF?
- CFO and CIO: how to implement a successful finance ERP project?
- ERP finance project: who should be involved in the company?
- The different implementation phases of an ERP project