In today's ever-increasing market complexity, CFOs play a crucial role in steering their organisations through the challenges posed by rapidly evolving technologies. A strong control environment emerges as a critical pillar of support.
This year's "CFO Compass Survey" highlights the importance of digital transformation and automation in ensuring business continuity. Intelligent solutions improve productivity and data reliability, act as safeguards against fraud and errors, ensure consistent compliance with policies and regulations, and establish a well-structured framework within the finance function that promotes proper segregation of duties.
The results encapsulate the views of over 150 finance leaders, operating in more than 15 industries across the SEE market, on their strategic approaches, change plans, and readiness for sustainability reporting.
Among the key findings:
- 65% of CFOs say that establishing a strong control environment is their biggest challenge and top priority
- 44% of the organisations have integrated the planning processes fully
- 34% of the finance leaders surveyed still find scenario analysis challenging, reflecting similar results to last year
- There is a 43% increase in the use of Big Data
- More than half of CFOs (51%) report that their companies are not ready for IFRS 18
Goals and Challenges What's on CFOs' minds heading into 2025?
CFOs in the SEE region are prioritising several key initiatives over the next 12 to 18 months to align their finance functions with evolving business demands:
- Upgrading Enterprise Resource Planning (ERP) systems
- Establishing a robust control environment and enhancing segregation of duties
Additionally, finance leaders are committed to strategic growth through market expansion and business partnerships within the organisation. They are increasingly incorporating sustainability and ESG initiatives to align operations with environmental objectives. Technological innovation, including AI and ML, is being explored to boost efficiency and innovation.
Despite these forward-looking goals, CFOs face significant challenges in navigating an uncertain business environment:
- Cost control and operational efficiency
- Regulatory compliance and risk management
- Talent management
The pressing need to accelerate the adoption of advanced technologies Processes
1 in 4 CFOs has upgraded their management reporting by adopting a more sophisticated and dynamic format
Compared to last year, there is a 47% increase in companies adopting dynamic management reporting with multi-level analysis, underlining a growing demand for precise data in a timely manner. To drive further change, finance leaders should treat transformation projects as a strategic business initiative.
The role of standardisation to finance function maturity Systems
52% of CFOs have achieved a combination of full and high standardisation in business processes
Standardisation is currently a major objective in the field of finance. Adopting a standardised format for management reporting in a capital group offers key benefits like enhanced consistency, comparability, and transparency across entities.
To achieve complete standardisation of its accounting information, an organisation should work on the following 3 components: a cloud-based ERP system, a uniform chart of accountants and consistent accounting policies among the group.
A stable control environment significantly impacts all business processes by providing a structured framework that supports the integration of digital technologies into finance and information management. Finance professionals now consider data migration as the biggest challenge, when upgrading to a new system. However, ERP systems do not come with a "segregation of duties" manual. Digital platforms can only replicate the already existing control environment and organisational structure. There is a set of domains that need to be addressed to ensure successful implementation.
Time to upskill teams to leverage tech-powered financial tools Competence
While there is a pressing need for upskilling team members to leverage tech-powered financial tools, the introduction of all these innovations combined, also means that the Risk and Audit universes of the companies are growing ever more complex.
CFOs need to invest in expanding the capabilities of the organisation's Risk and Internal Audit Function to make sure that the businesses move securely to their strategic goals.
Compliance
Only half (49%) of CFOs report that their companies are ready for IFRS 18
IFRS 18 represents a significant change in financial reporting, replacing IAS 1 and affecting all entities reporting under IFRS. The major changes include a new format for the P&L statement, introduction of Management-defined Performance Measures (MPMs), and updated requirements for aggregation and disaggregation.
CFOs should ensure ERP and reporting tools' setup and upgrade functionalities of present accounting systems to ensure compliance with statutory bodies, regulators, governmental institutions.
Are organisations ready to comply with the CSRD reporting? Sustainability
Тhis year the SEE CFO Compass Survey assessed the readiness of companies to comply with the new Directive for corporate sustainability reporting (CSRD) and its requirements.
- 32% of CFOs say that their companies produce an ESG report
- 35% have a specialised team in ESG reporting
Thе results indicate that many business organisations still underestimate the importance and the effects of the Directive.
PwC's CFO Compass Club
"PwC's CFO Compass Club" is proud to host leading finance professionals from the SEE region. Our community provides a platform that not only addresses current challenges within organisations but also looks forward to define the meaning of a "mature finance function" in the future.
CFO Compass professionals and authors:
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PwC's 2nd CFO Compass Survey in SEE
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