Welcome to Part II of our series on the changing role of the CFO and the impact of accounting ERP software on that role. In Part I, we looked at new areas in which the CFO demonstrates leadership, such as the selection of accounting ERP software and cybersecurity protection and awareness. In this article, we’ll look at the impact of accounting ERP software on the manufacturing accounting office and the CFO’s role in these changes.
Establishing KPIs in Accounting ERP Systems
The CFO often leads the discussions, along with other company leaders, in the financial and performance goals of the company. Key performance indicators (KPIs) measure the success of specific goals. These may be related to production, cost savings, marketing, operations, or other core functions of the company.
Establishing KPIs requires a numbers-based approach to goal-setting, which may be unfamiliar to many staff members. The CFO, trained in the use of analytics and financial data, is the best person to lead discussions in many companies around how to set reasonable and achievable KPIs and how to measure them. Knowing what to measure, how to measure it, and how frequently to report on progress towards goals should be steered by the CFO who understands the manufacturing business, its needs, and the industry’s sales cycles.
KPI Reporting From the Accounting and Finance Department
Regular reporting of KPIs often occurs in the accounting and finance department. The CFO can use the accounting ERP system to generate data to determine whether key metrics were achieved. The information from the accounting ERP system can also be used to analyze areas of strength and weakness within the company so that plans can be updated and used to address any areas that need improvement.
Risk Management Through Internal Accounting Controls
CFOs can also use the accounting ERP system to manage risk and enforce internal controls. Risk management begins by understanding the company’s financial data, sales history, and projects. By knowing the data and understanding the implications of the data, the CFO can then manage around potential marketplace risks and rewards.
Internal controls, such as having one person write checks and another sign off on them, ensure that the finances of the company are handled with diligence and honesty. They make it harder for people to succumb to temptation by implementing checks and balances in the accounting department. The CFO is often responsible for setting internal controls and enforcing them. The right accounting ERP software can make it easier through role-based permissions, for example, that will only allow people access to specific areas of the system designated by the CFO or another manager.
Artificial Intelligence and Accounting ERP Systems
Artificial intelligence (AI) plays an increasing role in the manufacturing environment. In the accounting and finance department, AI-enabled ERP systems provide reminders, automated monitoring, past due invoices, and other tasks to help the CFO manage the company’s finances wisely.
It can be challenging to keep up with all the changes taking place in software. Fortunately, the right choice of accounting ERP software enables the CFO to focus on critical financial management tasks. The software itself updates and provides support for essential action steps. This is the ideal way in which the emerging role of the CFO works with ERP software. The software supports the CFO’s increased responsibilities and leadership tasks.
The ever-changing role of the CFO means that CFOs can expect to learn, grow, and experience new things as they continue along their career paths. It’s an exciting time to be part of a manufacturing accounting department, and with the right software, a productive one, too.
Download this free eBook from Acumatica for additional insight into the role of the modern CFO: Top Technology Challenges of the Modern CFO.
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