The responsibilities and technological hurdles facing today’s CFOs are making their job more complicated than it was a decade ago. The days where Chief Financial Officers (CFOs) were only required to balance the books are long gone. Modern CFOs are expected to guide the company through a storm of new tax policies, IP dilemmas, and unpredicted tech disruptions. KPMG’s insight shed some light on the key areas CFOs must concentrate on for them to stay ahead in the US financial setup. Let’s break everything down and explore the challenges CFOs are up against and what they can do to stay ahead in the game.
Mastering the tax maze
CFOs in the US are being hit with an extra burden after the federal government proposed tax hikes of up to $4 trillion. Financial executives in various organizations are now required to adopt a proactive approach to tax management by continuously advising their boards on how to handle these changes. One of the trickiest challenges CFOs are facing is how to deal with Intellectual Property and most companies have already considered whether to bring their IP back home. It’s something that requires careful balance since CFOs are fully aware of how a worldwide minimum tax will affect multinational operations. With that in mind, financial officers will have to weigh the benefits of repatriating their IP against any possible risks before making a decision.
Dealing with the global minimum tax
For the US based CFOs who manage multinational companies, the introduction of a global minimum tax isn’t just another rule to cross off the list. This tax will completely change the game and push companies to reconsider their operational locations as well as how they structure their global financial strategies. Modern CFOs now have to make sure that they are compliant and their companies are well positioned to minimize potential blows to profitability. KPMG further emphasizes how it’s important to keep up with these changes, since this will make sure that a company’s tax strategy doesn’t put the business at a disadvantage on the global stage. Tax strategies that worked well before will now require a serious overhaul and this serves as a wake up call for many CFOs.
Staying resilient in tech issues
Technology has emerged as the backbone of almost every major company. Without tech, major companies won’t be able to run their operations effectively or even reach their goals. This has left CFOs with another burden of dealing with tech challenges such as global IT outages, data breaches, and cybersecurity threats which are becoming common in recent times. Even though these tech issues have other specialists who are responsible for managing them, CFOs can’t afford to sit on the sidelines while all this is happening. Financial officers are advised to work closely with their Chief Information Security Officers (CISOs) and Cybersecurity professionals, to maintain business resilience in the face of unexpected tech failures.
Managing risk in every direction
KPMG doesn’t hide the fact that risk management is becoming a CFO’s main responsibility, or in other terms a CFOs bread and butter. The wide variety of risks that CFOs have to handle, which range from massive tax adjustments to sudden tech outages, can be overwhelming at times. But the most successful financial officers foresee these risks before they even happen and plan how to respond to them in time. This has become a very critical part of their job, and all CFOs do nowadays is just sit back and observe any impending digital threats or tax regulations.
KPMG also reminds us that risk management is all about making the correct moves to guide companies forward despite uncertainties. CFOs are strategists, risk managers, and tech-savvy leaders all in one.
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