Top Challenges Faced by Today's Finance Managers

By Linda RoperNovember 1, 2021

In a rapidly changing corporate world, those within financial management are certainly facing more challenges today than they did even just a decade ago. Gone are the days when running an efficient finance department meant, having to solely focusing on record keeping and other day-to-day transactional tasks. Now, a finance manager’s role has shifted to encompass additional responsibilities in-line with developing technology and compliance.

From a lack of human resources and the introduction of digitised tax to the challenges that comes with remote working; these are just some of the biggest challenges faced by today’s finance professionals. Let’s explore each of these challenges for finance managers in greater depth below.

Challenges overcome by finance managers

1. Small Teams

At the start of 2021, there were 5.5 million small businesses in the UK containing just 0 to 49 employees. While this is something to be commended, it does present specific challenges to those in executive positions.

Finance managers, for example, find themselves working within smaller teams and wearing various hats to ensure objectives are met. This may include assisting finance team members with their day-to-day tasks, as well as performing their management role.

It also comes as no surprise that small businesses often lack a dedicated human resources manager. Therefore, tasks such as the hiring new team members, and subsequently training them, may also fall under new challenges finance managers are facing.

2. Embracing new Technology

With the digital transformation of businesses, financial professionals are also experiencing a radical shift in how they perform their duties. An increasing focus on technology has seen financial workers move away from the traditional spreadsheet and turn to automation solutions including cloud-based services.

This rapid transformation to digitised methods was partly brought about by the UK Government with their Making Tax Digital initiative. As a result, finance professionals have had to adhere to the initiative’s vision for the end of the traditional tax return and a ‘transformed tax system’ by 2020.

3. Reporting and Providing Real-Time Data

Data is a game changer for all areas of business, particularly finance. According to a survey from Deloitte, 49% of respondents said data analytics helps them make better decisions, 16% say it better enables key strategic initiatives, and 10% say it helps them improve relationships with both customers and business partners.

Despite its advantages, the requirement to report and provide real-time data can still pose challenges for finance managers. Along with dealing with poor data quality or inaccuracies, CFOs must also grapple with slow data production and the time-consuming nature of manual data ingestion. Without these responsibilities, however, a finance manager is unable to support the wider business.

4. Communicating with Other Departments

A Head of Finance is not only limited to working with their fellow finance workers. As an executive position, they must also communicate and collaborate effectively with other departments within the company, as well as additional stakeholders. Finance plays a very crucial role in business, because it is the department that looks after the funds coming into and flowing out of a business.

In a typical office environment, fewer challenges exist with this responsibility. However, in the wake of the Covid-19 pandemic, companies are now dispersed, with employees working from home or across several different locations. Therefore, trials such as different time zones, poor internet connections, and relying on teleconferencing technology can hinder this communication.

5. Rules, Regulations, and Compliance

All industries are subject to rules, regulations, and compliance, but perhaps none more so than the financial industry. In a survey of 1,100 financial services executives, 88% of respondents said they are challenged in managing regulatory change. The need to balance compliance demands as well as profitability goals is presenting the most difficulty. In order to do this successfully, finance professionals are having to work longer hours, as well as outsource tasks, or hire extra staff to manage the additional work required to keep on top of compliance.

Infographic: Top Challenges Faced by Finance Manager

Top Challenges Faced by Today's Finance Managers [Recap]

So to recap, here is a list of the main challenges faced by financial managers and finance departments:

  1. Small teams

  2. Embracing new technology

  3. Reporting and providing real-time data

  4. Communicating with other departments

  5. Rules, regulations, and compliance

In our follow up blog we discuss, how cloud-based expense management apps are helping finance departments overcome their top challenges.