Author: Alina Făniță, CEO, PKF Finconta

You best see the change in a company when you do the reconfiguration of the organizational architecture. But the subtler you see it when you do the diversification of the roles that each function has. From this perspective, extremely important in terms of size and impact is the diversification of the role of the financial director in this period of digital transformation.

The old title of chief accountant carries an ancient perfume of centralized economy, a concentrated decision at the top which reduces this role to a simple calculator and marginality. Today, the remodeling of businesses and their global and digital operating environment require not only the renaming, which has been happening for a long time but also the modification of the position of the financial director.

The new roles of the Financial Director

According to a study by McKinsey on the evolution of financial function in companies, the function of the financial director continues to undergo accelerated changes. If two years ago, four were the reporting roles to the CFO, today at least six roles report to the CFO. These differ depending on the industry, from the personnel in the procurement department, IT or operations, to those responsible for the relationship with investors.

While most of the time is devoted to dedicated activities, financial managers also produce value from new, non-traditional roles for this function, such as organizational transformation, digitization and the development of future leaders.

Role transformation involves cross-departmental responsibilities. The impact area of ​​the role defined by the new set of activities emphasizes the transformative role within the company and the influence of the financial director in its change.

Humanizing the image of the Financial Director

In these conditions, the humanization of the function also occurs. The financial director is no longer the unpopular boss who rejects or adjusts the budgets of the other departments, warns about expenses or investments. Its abilities also shift to human interaction and harmonization of views.

The financial director begins to play the integrative role of an executive director who has the general perspective of the functions, knows their areas of interaction and has a good relationship with the people so that together they can make the best decisions.

A new stake, the sustainability

Another role of the financial director is the solid positioning of the company from a financial point of view, in the long term. A role that also aligns with the sustainability requirements regarding financial, non-financial reporting but also environmental responsibility and new generations.

Non-financial reporting standards have empowered not only financial directors but also investors who prefer companies that show respect for the environment and society. This is why the role of the financial director becomes all the more important as these activist investors have important resources, are sensitive to these issues and are interested in the sustainability of the financial performance of the companies in which they invest.

The new normal, digitization

The role that a financial director may never have thought of having within the company is to promote digitalization. The technological development of the last five years has brought the financial position in the leading position on the digitization line of the company. Whether we're talking about process automation, data analytics, cloud computing, robot process or data visualization, more than half of McKinsey's financial directors have interacted with these technologies.

There are four stages in digitizing the financial function of a company:

1. Automation - Reallocating the human resource for non-repetitive activities
2. Data visualization - Facilitates financial planning and analysis for decision making
3. Data analysis - Extracting meaning and meaning from existing data
4. Integration - Communication between ERP, operations, supply chain management or financial systems with CRM

The study data do not include the reality in Romania, where, in most cases, Excel is well-rooted in the current activities of the financial department. Therefore, many of the Romanian companies are still in the first stage. It is a process of transition to new technologies that, the shorter, the higher the productivity, will refine the decision and capitalize on the development opportunities.

So, in Romania, the transforming role of the financial director is not so obvious outside the department of the department he manages. It still deals with reporting, balance, closing of the financial year. What the CFO has begun to do is measure the performance of change initiatives, monitor margins and improve cash flow, set performance indicators and company performance before beginning the transformation, to generate value. This new spectrum of activities that brings the financial director closer to the position of executive director, qualifies him to be the successor to the general manager, which is already happening many times.

About PKF Finconta

For more than 24 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.