CFOs working across Africa face unique challenges. Compared to the West, there are numerous considerations: payment methods differ from country to country, there are multiple currencies to deal with and varying access & use of forex across the continent. Also, the majority of businesses in Africa are SMEs, which means they have to go without expensive accounting software.
But, CFOs can use the ever improving technology suite to their advantage — the adoption of an improved CFO stack can help African businesses, and their CFOs, grow to new heights, and overcome historical challenges.
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How the role of CFO is changing
For the average CFO working in Africa today, a lot of their time is taken up by the quotidian tasks of managing transactions, reconciling payments and reporting tasks. The bulk of African businesses are SMEs therefore accounting software like Oracle or SAP are out of their budgets. The average CFO’s resources are usually a band of accountants who spend their days on data collection to determine the up-to-date status of each area of the company’s finances. There are tools that help streamline their work, but these typically exist only in singular areas which are often siloed and unreconciled. Huge swathes of data may be held across email and spreadsheets, which is left open to error and data breaches.
Africa also faces a unique challenge, in that a large number of transactions are carried out in cash and through mobile transfers. There are also issues with access to hard currency. Often payments between African countries must first be converted into dollars, before the currency of its final destination, which is expensive and can suffer when liquidity is unavailable. These various considerations cause a lot of active management for the average CFO, who would better serve their company by being removed from the day-to-day operations of finance, and instead spend time on strategic decision making.
A modern financial dashboard
There is a huge opportunity for fintechs to build a locally nuanced solution to support CFOs across Africa. Many tasks can now be automated and integrated into a singular dashboard which can offer a strategic overview of the company’s finances at a glance, taking in account the various payment methods across countries and currencies. This is particularly useful to companies working across the African continent, where each country has its own preference for how payments are made. With a greater overview of these various different payment networks, as well as where they may be open to threat, CFOs get a greater view of business finances in the moment and at a glance. They have a much better overview of the various rules and regulations across markets, securing their business further.
Streamlining for success
Businesses across Africa have access to many tools which provide organised, reconcilable and crucially, usable data from across multiple functions such as Payroll & HR, Accounts receivable and payables management, Treasury management & Payment reconciliation, among others. This tech-enabled, cloud-based and automated approach gives them a far greater degree of control to improve the business’ efficiency, accounting accuracy.
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By GlobalDataNgetha Waithaka is General Partner and Maina Murage is Investment Manager at tech growth fund, Norrsken22
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