insight magazine

Corporate Insider | Winter 2023

What’s Old Is New Again in Corporate Finance

To stay adaptable and responsive to today’s business challenges, corporate finance teams need to consider their lessons from the past.
Shifra Kolsky, CPA SVP, Chief Accounting Officer, Discover Financial Services


This time of year is when we often find ourselves both looking back in review and also looking ahead to our future goals. As I sit here reflecting on the past year, I find myself thinking of Peter Allen’s song, “Everything Old Is New Again.” In it, the lyrics say: “Don’t throw the past away, you might need it some rainy day.”

In many ways, these lyrics ring true to the ways in which finance teams operate. Although specific details may change in nuanced and important ways, the key themes that are relevant to a successful and impactful finance department are similar from year to year. That said, I believe the lessons from the past can—and should—be applied to the challenges of today.

With this in mind, here are five old issues for corporate finance teams to keep top of mind as they plan ahead for the new.

1. STRATEGY AND RISK MANAGEMENT

It’s no surprise that strategy and risk management goals continue to be a top priority for year-end planning. As we all know, finance departments play an important role in determining a company’s strategic direction. They:

  • Use projections and financial analysis to decide whether a particular project or product will yield the desired results.
  • Measure and monitor the progress of a project’s goals based on its defined objectives and key results.
  • Influence results through effective communication of its analysis of risks and opportunities.

The finance department also leads the company in identifying and assessing potential financial risks. Through scenario planning, they can analyze and study the impact of these risks using different approaches and provide an action plan for the company. While specific scenarios may vary over time, finance teams can learn from previous business and economic cycles to plan for future changes.

2. TECHNOLOGY AND TRANSFORMATION

As teams continue to search for ways to remain competitive, efficient, and relevant with the times, technology and transformation will be key issues for finance teams to consider each year. Notably, process optimization should be the primary consideration for finance teams ahead of any automation efforts. This requires a clear understanding of the desired outcomes of routine activities, along with the data sources and inputs the activities require and the controls to ensure quality. Additionally, highlighting key operational opportunities for improvement can allow for process enhancement and more efficient finance operations.

Of course, finance departments must continue to prioritize automation as a key to success in managing the increasing needs of their business partners and generating robust analysis to support data-driven decision making. Some finance teams will need to continue down the path of migrating systems and data to the cloud to take advantage of its constantly evolving capabilities. Others may need to focus more on prioritizing data-related projects to enhance accessibility and improve analytic capabilities. More advanced teams may want to consider looking for ways to leverage artificial intelligence and machine learning to gain new insights from their data, understand trends and variances, and assist in report writing processes.

Internal controls related to technology will also continue to demand focus. It’ll be important moving forward to find new ways to monitor performance of controls, and data security must remain at the forefront as companies enhance their systems and aim to meet the industry’s evolving needs.

3. ECONOMIC OUTLOOK

The last several years have required finance departments to polish their crystal balls in effort to predict how fiscal policies may impact the economy. The pandemic, ongoing inflation, geopolitical events, and more have thrown a number of unanticipated twists into the mix, taking a toll on global supply chains and commodity prices. Taking the lessons learned from these economic challenges, finance teams should focus on the long game, stay disciplined in spending, build strong relationships with suppliers and customers, and consider multiple scenarios as they manage their financing and capital needs.

4. REGULATORY CHANGES

Regulatory changes are an evergreen issue for finance departments. Among the most pervasive issues affecting a wide swath of businesses today are the global and domestic requirements for disclosures related to environmental, social, and governance (ESG) matters. Many companies have turned to their finance departments to lead efforts to ensure the accuracy and reliability of metrics and measurement for ESG disclosures, and there will be an ongoing need to allocate resources for implementing and maintaining strong systems and procedures for producing disclosures that’ll stand up to regulatory and audit reviews. Additionally, with different timelines for implementation, finance teams will need to plan strategically to ensure timely compliance.

Although ESG will be top of mind, finance departments must continue to monitor other ongoing rulemaking efforts from other agencies. For example, election-year politics, the expiration of certain tax policies, and governments seeking to reduce deficits are all things that could impact future tax rates. Also, the Financial Accounting Standards Board and the U.S. Securities and Exchange Commission continue to have a robust list of ongoing projects and proposed rules that’ll affect companies and industries differently based on applicability.

5. TALENT DEVELOPMENT AND MANAGEMENT

Lastly, the talent landscape continues to evolve and challenge finance teams. To help future-proof the department’s skill sets, finance teams will need to ensure there’s ongoing professional development that’s timely and relevant.

With a dwindling supply of accounting professionals in the pipeline, recruitment will continue to be a challenge, making retention a key issue. Additionally, questions surrounding remote/hybrid flexibility will likely continue. Therefore, companies will need to evolve their policies, and finance teams will need a seat at the table to ensure they can staff flexibly and effectively.

Of course, the challenges we face will differ for each of us, as our specific priorities and circumstances vary by industry, region, and unique situation. Still, we can all consider what we’ve learned from past experiences. As the song says: “We can order now what they ordered then.” What’s old is new again, and we should use that knowledge to stay adaptable and responsive to today’s business landscape.


The opinions presented in this article are those of the author and other contributors, in their individual capacity, and not necessarily those of Discover.

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