The role of the CFOs in retail is rapidly changing, moving beyond traditional accounting responsibilities.
Being a CFO, you cannot be reactive, defensive and overlook only financials and statutory compliance. You have to be in the front seat when it comes to retail business growth strategies like customer acquisition and retention, capital allocation, and risk assessment.
As inflation raises the cost of goods sold alongside rising profitability expectations, you must be rational, future-focused, and make calculated risks.
Successful retail business strategies go beyond cost-cutting. For this, you need to transition to strategic leaders and look for ways to reduce operational costs and increase productivity.
However, more than 89% of finance leaders said striking the right balance between cost cutting and investing for growth is a top challenge as per the findings of PWC’s August 2023 Pulse Survey of more than 600 executives.
Here’s how CFOs in the retail sector are making this transition, as well as best practices you should adapt to become stronger strategic leaders for better retail business performance management over time.
How is the Face of the CFO Changing to Enhance Retail Performance Management?
You may have been solely focused on retail stores’ financial operations. But for consistent business growth, your ability to transition into strategic leader and advisor to the executive team is imperative.
Let’s delve into a few ways you can transition from traditional financial management roles to strategic leadership, creating value through the top line, not necessarily by trimming costs.
Aligning Retail Performance Management with Core Business Objectives
Undoubtedly, retail space is becoming highly intricate due to diverse revenue streams, unique methods of valuing inventory, and complex financial structures. You need to combine the perspective of the CFO and COO to align retail performance management with key business objectives.
This offers a unique window into daily operations and core business objectives while having a focus on meeting financial targets. You can effectively measure a retail shop’s performance irrespective of whether it is locally owned or chain stores. It enables you to maximize operational efficiency, enhance customer satisfaction, and drive better profitability.
You can easily adapt to changing market conditions, capitalize on newer opportunities, demonstrate the impact of financial decisions, and achieve sustainable retail business growth.
Proactively Mitigating Potential Bookkeeping Risks
There are many reasons for retail business failure, but bookkeeping fraud using false statements is quite popular. It is difficult to detect fraud when you are juggling with increasing responsibilities.
Shifting from a reactive stance to a proactive stance, you can take bold moves to outsource bookkeeping process. That’s how you can easily detect, address and further prevent bookkeeping fraud.
Outsourcing retail bookkeeping services allows you to stay ahead of potential disruptions. Their deep domain expertise serves as a foundation for implementing a robust system of checks and balances, ensuring the authenticity and accuracy of your financial records. This instills confidence in stakeholders, including the executive team, investors, and vendors, reassuring them that you take necessary actions to protect the financial well-being of business.
Outsourcing Accounting Processes and Financial Reports
Effective retail accounting isn’t just about keeping books up to date. You need to govern areas critical to the success of business, including real-time financial visibility across all shop locations, use that insight to make strategic decisions, track inventory, and more.
Outsourcing accounting takes off repetitive and time-consuming bookkeeping and reporting tasks from the plate, freeing you to focus on more value-added activities, such as interpreting financial data, identifying trends, and analyzing key performance indicators.
The timely availability of financial data from the outsourcing team enables you to respond quickly to emerging trends, unknown shifts in market conditions, or sudden operational challenges, allowing for more agile decision-making and proactive strategic adjustments for better retail business performance.
The CFO’s role in retail is no longer confined to the back office. It includes a range of new functions for which your oversight is imperative. Connecting significant key performance indicators is vital for transition from lagging macro indicators like revenue and profit growth to concrete metrics around product adoption rates products, customer behavior, and more. This offers a tangible perspective beyond overarching corporate metrics.
You need to become a strategic leader and focus on the long game instead that helps to transform retail operation chaos into clarity and make decisions that provide value.
Outsourced accounting is the key to rising above the chaos and paving the way for prosperous retail excellence. And what’s better for you than gaining the benefit of reduced responsibilities while ensuring robust internal control over accounting processes, all without compromising accuracy?
