{"id":1052,"date":"2020-04-27T07:13:30","date_gmt":"2020-04-27T07:13:30","guid":{"rendered":"http:\/\/international.binus.ac.id\/finance\/?p=1052"},"modified":"2020-05-19T10:56:56","modified_gmt":"2020-05-19T10:56:56","slug":"the-future-finance-function-the-transformation-of-finance-role","status":"publish","type":"post","link":"https:\/\/international.binus.ac.id\/finance\/2020\/04\/27\/the-future-finance-function-the-transformation-of-finance-role\/","title":{"rendered":"THE FUTURE FINANCE FUNCTION: THE TRANSFORMATION OF FINANCE ROLE"},"content":{"rendered":"

In a report<\/a> issued by The International Federation of Accountants (IFAC, 2019) regarding a vision for the CFO and finance function, it is highlighted that the traditional role of finance function that primarily focused on financial reports has shifted into value creation. In the current environment, the majority of the value of business is not reflected in the balance sheets as in the old days. At present times, what drives the value of companies are intangibles in nature, as quoted from the report and portrayed below:<\/p>\n

\u201cThe value of a business has historically been determined by its tangible assets. In our current digital age and knowledge economies, tangible assets, including working capital, fixed assets, and financial capital employed, comprise far less of a company\u2019s value. Intangible value that is not measured nor communicated is generally reflected in market premiums that represent the difference between enterprise value and book value.\u201d<\/em><\/p>\n

\"\"<\/p>\n

As illustrated above, the shift from accounting for the balance sheet to accounting for the business does not happen overnight; rather it goes on through a series of steps. The first journey requires the finance function to understand the performance of the business comprehensively, then followed by a shift in role as enabled by several elements. The next journey emphasis the decision-making role as equipped by the six key enablers. Finally, the finance function must evolve to be able to communicate a story that focusses on how values are created and preserved by the organization.<\/p>\n

The first step to make sure organizations are on track on their transformation is for them to develop a vision for the finance function. This vision will then be translated into strategies, objectives, and the operationalization aspects. The following figure depicts the key enablers that can help organization in their finance function transformation journey.<\/p>\n

\"\"<\/p>\n

A similar report<\/a>, also issued by IFAC (2019), discusses CFO and finance function roles for the next decade. Some of the key trends discovered are that the finance functions look beyond financials to measure organizations\u2019 success and performance, we are now living in unprecedented levels of regulation and uncertainty, and business model is continuously disrupted. In the midst of the changing landscape of the finance function, IFAC identified seven key roles for finance and accounting professionals to stay relevant in current environment and elevate their contributions to organizations:<\/p>\n

    \n
  1. Co-pilot \u2013 able to lead and influence people, as well as facilitate change<\/li>\n
  2. Navigator \u2013 direct the organization towards creating value<\/li>\n
  3. Brand protector \u2013 revisit the stewardship role of the profession<\/li>\n
  4. Storyteller \u2013 narrate the value creation of the organization to various stakeholders<\/li>\n
  5. Digital and technology enabler \u2013 utilizes digitalization and technology to support the organization\u2019s decision-making process and growth<\/li>\n
  6. Process and control expert \u2013 safeguard the operational excellence of the organization<\/li>\n
  7. Trusted professionals \u2013 maintain objectivity in performing the role<\/li>\n<\/ol>\n

    Sources:<\/p>\n

    IFAC. 2019. A Vision for the CFO & Finance Function: From Accounting for the Balance Sheet to Accounting for the Business & Value Creation<\/em><\/p>\n

    IFAC. 2019. Future-Fit Accountants: CFO & Finance Function Roles for the Next Decade<\/em><\/p>\n

    \u00a0<\/em><\/p>\n

    (AL)<\/p>\n","protected":false},"excerpt":{"rendered":"

    In a report issued by The International Federation of Accountants (IFAC, 2019) regarding a vision for the CFO and finance function, it is highlighted that the traditional role of finance function that primarily focused on financial reports has shifted into value creation. In the current environment, the majority of the value of business is not […]<\/p>\n","protected":false},"author":25,"featured_media":1057,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,5,6],"tags":[],"class_list":["post-1052","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-news","category-slideshow"],"featured":{"small":"https:\/\/international.binus.ac.id\/finance\/files\/2020\/04\/fig-7-480x319.jpg"},"_links":{"self":[{"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/posts\/1052"}],"collection":[{"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/comments?post=1052"}],"version-history":[{"count":2,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/posts\/1052\/revisions"}],"predecessor-version":[{"id":1183,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/posts\/1052\/revisions\/1183"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/media\/1057"}],"wp:attachment":[{"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/media?parent=1052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/categories?post=1052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/international.binus.ac.id\/finance\/wp-json\/wp\/v2\/tags?post=1052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}