What's Keeping CFOs Awake at Night?

Finance leaders are constantly bombarded with advice and marketing hype offering "solutions" to (sometimes non-existent) problems, so it's refreshing to encounter a publication that takes a deeply informed look at the real dilemmas that CFOs confront every day -- without rushing to provide answers.

A new workbook from Deloitte explores nine critical debates currently shaping finance.

It opens with a quiz, Cosmo-style, that asks you to rate your department's performance in some key areas and even gives you a score that tells you roughly how well you're doing. But don't expect hard-and-fast answers to any of the questions the book raises.

"We don't try to steer the answer to any of these issues in any particular way, but in describing the debates we tried to cover a range of things that keep CFOs awake at night -- issues that are cross-industry and that apply to a very large population of companies," says Sanford A. Cockrell III, New York City-based national managing partner with Deloitte LLP's CFO program. "These are things that nag at you and you've got to get done -- like when you're driving home at night and you're thinking, 'I've really got to figure out if I'm going to sign that outsourcing contract.' "

Deloitte called on external subject matter experts as well as its own internal expertise to cover the pros and cons of the nine debates. Here are some sample issues and arguments:

Should you provide earnings guidance? Doing so may be a pain in the neck, but you could get hammered if you don't.

On the other hand, plenty of well-respected companies have abandoned the practice.

Point: Providing guidance requires time and effort that could be better spent on activities that improve business performance. Counterpoint: The finance staffers who crunch the numbers are not the ones who would provide strategic decision support.

Should you hire for current skills or for future potential? It's a familiar dilemma: If you hire people with just the skills to tackle the things you need to get done right now, you might be able to postpone or even eliminate training costs. But you might get stuck with people who can do only one thing and have trouble adapting to changing conditions.

Human capital issues are front and center in several other controversies covered in the workbook. "Offshoring, outsourcing, the way you structure the finance organization -- talent is the common denominator in all of those debates," Cockrell notes. While many organizations have been blindsided by the talent crunch, he predicts that "over the next few years this will rise to the very top of their agenda. CFOs are really starting to be concerned about this."

Should you take action on sustainability? Why start a formal sustainability reporting program when there are no regulations in place yet, and it's not even clear what good reporting would look like?

On the other hand, investors are looking closely at environmental and sustainability issues. Maybe it's time to take the first step, even if it's only figuring out what you need to do.

Each organization will have to figure out the answers for itself, Cockrell says. But he's emphatic that they can't simply ignore the issue. "Unfortunately, there are some companies that could be embarrassed by statements they've made because the systems and processes they need to capture the truth haven't been in place," he notes. A CEO may tout a company's green credentials, but more likely than not it'll be the CFO's job to collect and validate the data that supports those claims. "And that's naturally what finance organizations do," Cockrell adds. "They have the skill sets and processes in place to help the business do that."

Download the Deloitte publication "When CFOs Debate" here.

Deloitte is seeking input from readers about other important areas of debate in finance; add your 2 cents here.