5 Ways CFOs Can Budget for 2016
As a CFO, you’re charged with keeping on top of a company’s spending and making the most efficient use of its budget. What can you do to get the best results in the new year? We’ll look at a few methods.
Rethinking The CFO Role
Thanks to years of upheaval since the economic downturn, CFOs are currently rethinking their roles. The company number cruncher is turning into a driver of innovation. How can a CFO encourage growth in the 2016 while still saving money? Here are a few ideas:
- Develop a strategy that aligns growth with resources. Prioritize the company’s goals, and evaluate any potential risks.
- Track performance for 2015 to make projections for 2016. If you manage and measure the performance of the company, you’re better equipped to make decisions regarding staffing or investing in new technology.
- Use financial analytics. The financial capability of a CFO remains his or her core talent. Take a hard look at the analytics from 2015, and use them to drive your 2016 innovations.
Focus On How, Not How Much
The unfortunate reality is every company reaches a point where it needs to make cuts to maintain its bottom line. The best way to approach cuts is to address how to make them stick, rather than just throwing out a number.
One of the biggest challenges of making cost cuts is maintaining them over time. Too often, the CFO will determine how much needs to be cut and defer to individual managers to keep track of those cuts. Instead, create benchmarks for saving money. Follow up with each manager individually, if possible.
Look At Factoring
The act of factoring can save or earn big money. Here’s how to make factoring work for you in 2016:
- Suppliers often offer discounts on accounts. As an added bonus, suppliers will often negotiate an even higher discount for a customer who consistently pays in cash.
- Time is a valuable resource, and management can save time and money by delving into accounts receivable.
- Factoring opens new growth opportunities. Along with the state of the market, opportunities for growth are one of the most important elements for a business. Looking into factoring opens cash flow, leading to prospects that weren’t previously available.
Invest In The Digital Age
Cloud computing is one of the easiest ways to pad your bottom line in 2016. Product Lifecycle Management (PLM) software accelerates time to the market while reducing engineering change order cycle times.
Collaborate With The CIO
Keeping a running dialogue with your chief information officer is good way to get the most out of your budget in 2016. Ask your CIO questions like how to improve return on investment by improving supply change management or how investment in technology can lead to bigger gains down the road.
CFOs can be known as the “no” people, but they don’t have to be. Increasingly, CFOs drive innovation. If you follow these guidelines, you can too – while remaining on budget. Look for these and similar ways to break through in 2016.
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