By Olov Lindqvist, Chief Technology Officer, Konsolidator
Boohoo recently announced the appointment of a new CFO from Trainline, Shaun McCabe. This comes after the retailer announced its first-ever sales drop, where profits fell 94%. The tide appears to be turning for Boohoo, and many other fast-fashion brands, who are struggling to remain profitable. Major competitor Missguided fell into administration earlier this year, and now Boohoo is under increasing pressure to ensure it does not follow.
For a business operating at the sheer scale of Boohoo, margins can be tight and every efficiency needs to be pursued to keep the company profitable. Any CFO coming in needs to look at the entire business’ tech stack to ensure that they are minimising time spent by employees on repetitive tasks, and maximising value-building work also in the finance department. From ensuring the data flow is seamless, to building back-end tech systems to support in fulfilment, to workplace tools that can automate parts of any department. Today companies need to ensure that every team is robustly supported by the best tech available, and no department, like finance, ends up collecting the data manually and risk error-filled reporting.
The role of the CFO has changed significantly in recent years and no longer just focuses on number crunching. The role has pivoted to encompass more elements to support the CEO’s strategies, meaning that they are even closer to the cutting edge of decision making within the business.
There is no doubt that as Boohoo focusses on shifting its strategy, McCabe will have increased responsibilities and influence on ensuring how the business remains afloat. The expansion of the CFO role means that tech and utilising time – or money-saving tools – needs to come under McCabe’s remit, too.
How technology can support financial teams
Of course, this doesn’t exclude looking within the finance team itself to maximise efficiency. Many accounting and auditing firms continue to rely on outdated systems, such as Microsoft Excel, on a day to day basis to handle finances and calculations. However, this is no longer enough as it is prone to error. This can have damaging impacts on budgets and devastating consequences for a business’ reputation and even ruin credibility, as seen in the JPMorgan scandal, where an Excel error led to the colossal loss of nine billion dollars.
No matter how careful or precise you can be with Excel, there is always a risk. For CFOs to innovate within their businesses, they require innovative tech solutions.
With this in mind, automation better handles the complexities around financial calculation, with no room for manual error or miscalculation. Through the use of sophisticated consolidation technology that automates financial processes and reporting, CFOs and finance teams will be able to ensure that all financial work is precise and accurate. Automation and technology also ensures that financial professionals are able to track the source of every figure – something that is crucial for a business looking to save costs and operate efficiently.
Complex data tasks and financial consolidation require nothing less than accuracy. Implementing automation now will remove manual error from the equation. As technology is more difficult to trick, it creates even less room for mistakes and miscalculations.
Boohoo is under increased pressure to ensure that its business remains profitable, and that it can thrive in a competitive retail landscape that is marred by a plethora of challenges, from supply chain issues through to increased operational costs. A new CFO at the helm can help steer the business through these challenges, but in order to do this efficiently, it is essential that finances remain robust. The CFO and financial teams must be supported by automation and technology so that financial consolidation is accurate and efficient. From this, financial teams can focus on more meaningful tasks, while the CFO can dedicate more time to focus on how to steer the business in the right direction and towards further success.
Konsolidator is a cloud-based tool that automates and standardises financial consolidation and reporting processes.