Guiding strategy is one of many duties CFOs often perform as their focus in organisations has expanded far beyond their financial statement responsibilities.
In not-for-profit organisations, finding time to concentrate on strategy often is a challenge as busy CFOs juggle multiple duties.
“I don’t know what your day is like, but mine typically goes something like this,” Michael Forster, CPA, CGMA, the CFO of the Woodrow Wilson International Center for Scholars in Washington, said at this year’s AICPA National Not-for-Profit Industry Conference. “I have a to-do list. I don’t touch it because there are a bunch of people asking me to do a whole bunch of things that I did not set out that day to do.”
The audience of CPAs applauded knowingly at Forster’s statement of what’s apparently a common phenomenon. Not-for-profit finance department heads believe they don’t spend enough time on strategy because of interruptions from other departments, according to a new survey.
A gap exists between the time each week that finance leaders would like to spend (three hours) and the time they actually devote (1.9 hours) to strategy, according to the Nonprofit Finance & Accounting Study survey report released Tuesday by accounting software provider Abila.
Interruptions from other departments occupy 5.4 hours per week for not-for-profit finance leaders, and 49% of the more than 350 survey respondents from not-for-profit organisations said such interruptions are their biggest challenges.
The only task that occupies at least as much of not-for-profit finance professionals’ time as interruptions is preparing for the month-end close, which also takes 5.4 hours per week.
In addition, while many of the survey respondents hold senior-level positions, nearly all of them remain involved in day-to-day activities, as 79% of larger organisations and 83% of smaller organisations use small, lean finance teams.
At the same time, they are actively involved in decision-making across the entire organisation, not just the finance department. More than two-thirds (68%) of respondents said they have either significant or considerable influence across the organisation.
“Although the importance of our finance tasks have not diminished in any way, CFOs have had to sharply increase their focus on companywide concerns,” Amy West, CPA, CGMA, the CFO of AHRC in New York City, said at the AICPA conference. “The role of the CFO now extends far beyond accounting and reporting. CFOs are now expected to spend more time as strategic advisers as opposed to functioning as the guardian of the balance sheet.”
If only they can find the time. The Abila report suggested that finance executives provide specific times when other departments can disrupt, as they often are just seeking small bits of information from finance that are needed to plan, budget, and create their own reports.
Forster said it’s also important for finance leaders to explain the opportunity costs that occur when disruptions prevent finance from handling other duties to the organisation.
“There’s a to-do list that’s sitting over there that we can’t get to,” Forster said. “Those are the opportunity costs. It’s Prioritisation 101. We’re making choices about what’s the most critical and pressing thing to get done. … We have to be able to articulate the opportunity costs to help manage the expectations of our customers.”
—Ken Tysiac (firstname.lastname@example.org) is a CGMA Magazine editorial director.