10 Big CFO Trends for 2024

1. Focus on cost optimization and efficiency

Cost optimization and working capital efficiency are top of mind for CFOs as they balance inflation-driven cost headwinds with organizational growth goals. In the past, CFOs had limited scope in terms of how they could drive cost cutting and efficiency initiatives because data on expenses and operations was often siloed in the business operating units. CFOs were left reporting periodically on the effects of business decisions after the fact. Combatting rising costs in that environment often meant general across-the-board cuts rather than targeted reductions. However, advancements in financial software and data analytics have allowed the finance department to become a stronger strategic value creator, using timely and even real-time data from across the organization to support decision-makers. AI can also change how finance operates with the rest of the business, facilitating closer and more frequent collaboration with other business leaders to quickly model various scenarios and generate predictive insights.

For instance, by using predictive analytics and machine learning, finance leads can automatically compile data from historical and current sources to continuously predict future cash flows. With faster, more accurate cash flow forecasting, CFOs can make proactive moves that help maintain healthy liquidity levels—such as taking advantage of early payment discounts when the company has excess cash or reassessing loan positions when money is tight. CFOs can also provide context and data-driven insights to support informed decision-making, helping business units allocate resources effectively to areas expected to generate the most value.

2. Emphasis on digital transformation

With CFOs under pressure to do more with less, many are doubling down on the company’s digital transformation as the answer. In Deloitte’s 4Q 2023 CFO Signals report, 80% of CFOs said they expect their companies to use additional automation and digital technologies in their business in 2024. Meanwhile, 76% expect digital transformation and technologies to play a more significant role in achieving their company’s strategy. When the whole company embraces an integrated ERP platform, teams can automate manual processes, GenAI to take insights to new levels, collect and share reliable information to react to market shifts, and thus gain a competitive advantage while still containing costs. For instance, a company can set up customized dashboards that automatically report on critical key performance indicators without requiring manual data compilation. Such a dashboard could let a company monitor changes in sales by product or service, and if sales lagged, the business could quickly respond by improving sales training, testing new marketing or product configurations, or adjusting production forecasts.

3. More strategic use of data analytics and AI

In a survey by Grant Thornton, 61% of finance executives expected their organizations to invest in AI in 2024, topping the investment priority list. Data analytics and business intelligence came in third at 39%, only slightly trailing cybersecurity investments. For so long, the gathering of accurate, up-to-date information has been the priority. Now it’s clear that CFOs are looking to garner more actionable insights from their data—and using advancements in data analytics and AI to make it possible.

Recent developments in AI are changing how companies do business, and the finance department is no exception. For example, much of the financial close process—including manual collection, consolidation, and reporting of data—can be automated using AI. This isn't just a time-saver. Using AI in the financial close process allows CFOs and their teams to devote their attention to more meaningful work such as data analysis, strategy, and action. In addition, AI can provide recommendations for complex activities such as optimizing capital allocation and revenue growth, improving negotiating positions, and facilitating automated business-to-business transactions. AI models can provide data-driven predictions to facilitate more effective real-time decisions. In a financial reporting scenario, GenAI can help prepare first drafts of 10Qs and 10Ks, including footnotes and management discussion and analysis (MD&A).

4. Focus on cybersecurity risks and compliance

At the current rate of growth, damage from cyberattacks will amount to about $10.5 trillion annually by 2025—a 300% increase from 2015 levels, according to Cybersecurity Ventures. As cyber threats increase in both number and sophistication, so do the regulations around them. In 2023, the US Securities and Exchange Commission (SEC) adopted a rule that requires public companies to disclose material cybersecurity incidents. This step indicates that cybersecurity incidents are now important information for investors and that failure to disclose them can lead to significant repercussions for CFOs.

Considering the growing financial, regulatory, and risk impacts of cybercrime, CFOs are taking a more active role in cybersecurity. Working alongside the CISO, the CFO can help board members and executive leaders understand the cyber risks to the business—in quantified, financial terms—so the company can make appropriate investments in cybersecurity technology and insurance to mitigate those risks.

5. Emphasis on financial risk management strategies

The coming year promises to keep CFOs on alert when it comes to financial risk—market, credit, liquidity, and operational. In response, CFOs are implementing proactive, data-driven enterprise risk management strategies made possible by technology. Finance leads are embracing data analytics and AI to analyze large amounts of financial data quickly so they can identify trends, patterns, and anomalies that may indicate potential risk. Technology is also helping CFOs conduct stress testing and scenario analysis to gauge the impact of identified risks and develop appropriate contingency plans. With a global financial management platform in place, CFOs and their teams can continuously monitor the company’s financial health, including key risk indicators, financial markets, credit exposures, and liquidity positions.

6. Expansion of social responsibility and sustainability goals

Environmental, social, and governance (ESG) reporting has expanded as ESG has become part of regulatory requirements, investment strategies, and company policies. With this expansion, social responsibility and sustainability goals and tracking have transformed from optional extras to integral elements of the business. For CFOs, that means finding ways to embed these goals into the long-term business strategy, set standardized metrics and measurement, and deliver reliable reporting around ESG.

7. Focus on talent management and retention strategies

A continuing labor shortage, rising salary costs, and abnormally high quit rates in certain roles and industries have kept talent issues high on the CFO priority list, driving finance leaders to take a larger role in talent management and retention. Accounting, for example, is suffering from a labor shortage as people leave the profession due to long hours and stressful work, and fewer people are entering it out of college. In general, recruiting, training, and onboarding new employees can be costly, and turnover can disrupt productivity and performance. Human capital also plays a critical role in the company’s overall strategy and success. So, to create a more connected approach to workforce planning, effective CFOs are working more closely with human resources to link the company's people strategy with its business strategy. The two functions are making more informed decisions together around salary increases, benefits, skills development, finance technology, and future headcount needs, all of which can help improve employee retention and development.

8. Move toward global tax planning and compliance

The complexity of global taxation requires CFOs of multinational companies—or those planning to expand—to take a very active role in global tax planning and compliance. Global tax planning significantly affects the company’s bottom line, influencing decisions such as expansion into new markets, mergers and acquisitions, and restructuring activities. CFOs must work to facilitate compliance while minimizing tax liabilities by analyzing tax treaties, creating tax-efficient entity structures, and determining strategic transfer pricing.

9. Use of zero-based budgeting techniques

Zero-based budgeting (ZBB) techniques involve creating a new budget from scratch every budgeting period instead of starting with and adjusting the previous period’s budget as needed. As CFOs look to control costs and allocate spending to areas that produce the most value, ZBB is one option to fight budget inertia. This technique requires business unit leaders to justify spending, revenue, and investment plans each cycle, and hopefully make sure they’re getting the most out of the money spent. The downside to this approach is that it very likely means more time and staff attention required for budgeting. It can also lead to short-term thinking, since budgets tend to focus on the next cycle.

10. Prepare for possible M&A opportunities

M&A activity cooled in recent years since its 2021 highs, but the market is showing signs of a resurgence. Pent up demand for—and supply of—deals and the pressing need for companies to adapt and transform their business models are driving M&A interest despite a less-than-ideal financial dealmaking environment. Under these conditions, companies that come out on top are those that can demonstrate strategic value, are well prepared, and can move fast once the right opportunity arises. Even CFOs that aren’t actively looking to buy or be bought are making it a priority to assess potential acquisition targets and/or buyers. Particularly as companies look to reinvent themselves to stay ahead, effective CFOs are actively evaluating acquisitions that will allow them to scale, gain access to technology and talent, and accelerate growth. They’re also considering divestitures of non-core or underperforming assets that can allow them to redirect resources to more strategic growth areas.