More than bean counters

Chief financial officers have long been tasked with managing the fiscal responsibilities of companies — everything from financial planning to tracking cash flow. But increasingly, other C-suite executives and board members are relying on these finance experts for strategic and operational leadership.

In fact, an April 2022 report from global consulting firm McKinsey & Co. shows that the share of jobs reporting to CFOs continues to increase. This includes roles that would typically report to a CFO or controller — such as employees specializing in procurement, mergers and acquisitions, and investor relations. But now, cybersecurity, tech and risk management jobs are also likely to report to CFOs.

CFOs at Virginia-based companies and organizations are certainly experiencing this trend.

“I don’t think CFOs just sit in the corner silently waiting to say the word ‘budget,’ like was the case 20 years ago,” says Don Halliwill, CFO and executive vice president for the Roanoke-based Carilion Clinic health system. “We’re a lot more involved on the operational side.”

Particularly as a nonprofit, Carilion has to be focused on planning for future financial needs — looking ahead as far as 20 years down the road, Halliwill says. It also has to be focused on reinvesting income into new facilities, one example being Carilion’s 2021 $50 million renovation of a 150,000-square-foot JCPenney store at Tanglewood Mall into a children’s pediatric medicine center.

“So how has my role changed?” Halliwill questions. “Well, instead of just thinking in the box, leadership is thinking about how we can meet the capital needs of the organization. We’d never done that before.”

CFOs also have been tasked with tracking ESG — environmental, social and corporate governance efforts, says Stephanie Peters, president and CEO of the Virginia Society of CPAs, a professional organization representing about 13,000 certified public accountants in Virginia. “It’s many of the CPAs and the accounting departments that are responsible for tracking different elements of ESG and reporting on how that company is doing,” Peters explains.

While CFOs now may be expected to participate in a more expanded role, being tasked with more operational and strategic roles makes sense in context of their roles, says Clyde Cornett, CFO and executive vice president of Richmond-based community development financial institution Virginia Community Capital.

“We’ve always been expected to play a role for the CEO and the board as [a] consultant adviser working on strategy,” he says. “But more and more I’m finding that I’m being asked to play that role with the business lines as well as a little bit deeper in the organization, which I think is good. I think most CFOs are natural problem solvers.”

But while some CFOs may be comfortable with their expanded roles and expectations, there are new challenges and trends facing corporate finance and accounting jobs, namely the growing talent gap for CPAs and the implementation of artificial intelligence and other new technologies.

Talent gap

In 2019, the accounting industry peaked in terms of the number of employed accountants and auditors, according to the Controllers Council, a professional organization that provides educational resources and programming for controllers, CFOs, accountants and auditors.

But ever since its peak, the number of employed accountants and auditors has dropped a staggering 17%, according to a Bloomberg Tax analysis. Meanwhile, U.S. Bureau of Labor Statistics projections show that there will be more than 136,000 open accounting and auditing positions each year until 2031.

“Staffing talent is still the No. 1 concern. … CPA firms, as well as finance departments on the corporate side, are all feeling the strain of needing talent,” Peters confirms. Some of the major challenges in recruiting for and retaining accounting talent include barriers to entry such as the extra credit hours required to become a CPA — a bachelor’s degree typically requires 120 credit hours, but to qualify for CPA certification, candidates need 150 credit hours.

“Talent is hard to find,” says Jim Barker, CFO of Roanoke-based dental care insurer Delta Dental of Virginia. “When you find that, you don’t want to let it go.”

Securing talent can also be especially challenging for nonprofits, which often can’t afford to match the higher salaries or better benefits of large corporations that hire CPAs. The median salary for accountants and auditors is about $77,000, according to the U.S. Bureau of Labor Statistics, but CPAs who work for large companies like McLean-based Capital One Financial Corp. can make over $100,000, according to Glassdoor.

“It’s a really competitive market right now and it is very hard,” Cornett says. “Even just in Virginia, it’s very hard for us to compete for finance talent with somebody like Capital One just right down the street because they have more resources.”

But something else might shake up the talent gap and even further alter the role of CFOs, CPAs and accountants: the implementation of artificial intelligence and other technologies in accounting practices.

Accounting for AI

Many entry-level or early-career accounting jobs focus on accounts receivable and accounts payable functions, which are focused on outstanding bills and invoices for the company. These processes, however, are largely repetitive and are therefore vulnerable to takeover by artificial intelligence or other automated technologies, CFOs agree.

Richmond-based Markel Food Group, which provides automated food equipment and consulting services to food processing companies, hasn’t yet implemented AI for these tasks, but the company’s CFO and executive vice president, Cindy Yao, is definitely taking note. Eventually, she says, “some of the more routine or repetitive work probably will be pretty much taken over by bots or other types of automation capabilities.”

Delta Dental of Virginia has already started using AI tools to help with operations and accounting, including processing accounts payable reports, Barker says. “They sound small, but those are some pretty high-volume transactions that are just sort of nuisances, and we can have people doing something a little bit higher level that they may enjoy more,” Barker says.

Other finance executives have used AI to save time by drafting emails and correspondence and even performance review templates, Peters says.

And with more CFOs taking on leadership for company tech needs ranging from IT to cybersecurity, financial chiefs are faced with the challenge of figuring out whether to invest in emerging technologies like AI, Halliwill says.

“It’s become more difficult from a financial perspective as the CFO to determine the right timing for investing in technology,” he says. “You invest in something, and by the time you get it implemented and paid for, there’s the next generation. But you can’t wait forever and not make any investments.”

There has also been concern that AI implementation in accounting and finance positions is also contributing to the talent gap in finance departments. Some college students may already be choosing different career paths out of fear that accounting jobs are vulnerable to being taken over by AI.

But college students also are hearing horror stories from current finance workers about heavy workloads and little to no work-life balance, and Peters is hopeful that AI may provide some help by automating rote tasks.

“These types of technologies can alleviate that and start to change the narrative and say, ‘Wow, we’re using tools that make grunt work go much faster,’” Peters says. “‘Now we can learn and do higher-value types of services and not be there so long … and have a life.’”

As technology plays a growing role in the workforce, Barker says, a focus on mental health, work-life balance and adapting to hybrid or remote work will be critical in gaining and retaining accounting talent in corporate finance departments.

Mental health “is our biggest challenge right now,” Barker says of finance departments. “The challenge is connecting or reconnecting with others — our teams,
customers, new team members, etc. — in this ‘new norm’ of hybrid and remote workforce. The mental health aspect is definitely real and dangerous because the potential harm is not overt.” 

Read about Virginia Business’ 2023 Virginia CFO of the Year award winners: 

Large business | Cindy Yao, executive vice president and CFO, Markel Food Group

Small business | Jason Chesky, CFO, Logenix International LLC

Small nonprofit | Clyde Cornett, CFO, Virginia Community Capital

Large nonprofit | Jim Barker, CFO, Delta Dental of Virginia