Priorities for CFOs in 2025

2024 was quite a year for finance teams. From the uncertainty of an election year and a tumultuous market to the ongoing accountant shortage and the growing interest in AI, there was plenty to keep CFOs up at night.

With the start of the new year, financial leaders are looking forward to the new opportunities that 2025 will bring, while also keeping an eye on potential risks that may carry over from 2024.

The evolution of the Office of Finance continues

The responsibilities of the Office of Finance have been evolving, and this trend will continue into 2025. I believe we will see a shift from traditional, heads-down tactical accounting to a more strategic, heads-up approach. CFOs will need to broaden their perspective, linking financial metrics with overall business operations to assist their executive teams in determining and reporting progress against strategic goals.

A recent study by the Visual Lease Data Institute predicts that lease portfolios will be a key focus for finance leaders in 2025 and beyond, helping to drive business strategy. Today, 100% of surveyed finance executives are concerned with maintaining control over their lease portfolios, including the ability to maintain compliance with ESG reporting requirements (52%, compared to 44% in 2023), maintaining data accuracy and completeness (49%, compared to 48% in 2023) and reacting to unforeseen circumstances (49%, compared to 46% in 2023). These concerns stem from real consequences, with 99% of real estate executives reporting negative outcomes from inadequate lease controls, including overpaying rent or expenses (36%), the inability to respond to changing circumstances (36%), or missing an opportunity to update unfavorable or unwanted terms (31%).Given the range of risks and opportunities associated with lease portfolios, CFOs are already making decisions to support lease portfolio management — with 61% saying their companies have hired new personnel to support lease management and 58% report outsourcing related work to third-party specialists. 

The result of investing in the dedicated tools and technology needed for lease management can be significant cost savings, ensuring compliance, and positioning enterprises to capitalize on emerging opportunities. Moreover, I see the ability to engage in financial storytelling — communicating insights derived from complex data sets such as lease data — as paramount in 2025 and beyond. The ability to do so will depend on how well finance leaders work with their counterparts in other critical departments, including real estate, IT, sustainability, operations and legal.

New ways of tackling the accounting shortage emerge

The industry-wide accountant shortage is not a new issue; it has persisted throughout 2024. This shortage is driven by several factors, including stringent CPA requirements, an aging workforce and burnout leading some professionals to leave the field. As we approach 2025, various solutions are being proposed to address this shortage. For instance, some states are considering allowing prospective accountants to bypass the fifth year of education traditionally required for CPA licensure.

While it's essential to maintain high qualification standards, practical experience is equally important. Offering new CPAs an additional year of real-world business experience, rather than additional schooling, could enhance their readiness and reduce barriers to entry into the profession. This experiential learning bridges the gap between theory and practice, providing new candidates with a deeper understanding of their roles and responsibilities, thereby better preparing them for their careers.

Like many CFOs, I am keen to see how these changes unfold. While enhancing efficiency within finance and accounting roles is paramount, leveraging technology is a key component in achieving this. 

While interested in AI, finance professionals are concerned about its impact

I anticipate that CFOs and the Office of Finance will increasingly assume a strategic role in areas traditionally managed by other departments, such as technology adoption.

The recent VLDI report indicates that all surveyed finance executives (100%) agree on the benefits of AI for the Office of Finance, particularly in automating manual tasks and processes. However, it's noteworthy that 48% of these executives also identify the lack of a strategic approach to utilizing AI for efficiency improvements as a major concern in the finance industry today.

By implementing advanced tools such as AI and automation, finance teams can streamline processes, reduce manual workloads and improve accuracy. These technologies not only help with managing routine tasks but also enable finance professionals to focus on more strategic activities, driving overall business performance. As we navigate these changes, it is essential to adopt a strategic approach to technology integration, ensuring that it aligns with our goals of efficiency and effectiveness.

I recommend organizations look to first apply AI to low-risk tasks/areas within their business to really understand the intricacies and limitations of the technology. There's no reason why finance leaders need to do this alone — by leveraging other agents of change within their organization, they'll be more likely to anticipate the common pitfalls that come with rolling out new technology. A collaborative approach will empower these leaders to understand how to leverage AI within finance for maximum impact and minimum risk — such as automated data extraction.

For entry-level finance professionals, it's important to remember that while embracing new technology is essential, mastering the fundamentals of finance and accounting is equally crucial. The true value of AI emerges when foundational knowledge is combined with technological advancements.

Striking the balance in 2025

As we look ahead to 2025, finance leaders will face a mix of familiar and evolving challenges. Concerns about the longevity of operations will persist, especially when it comes to managing costs and driving revenue growth.

With the changing landscape of capital access and a heightened focus on cost efficiency, CFOs will need to play a more active role in strategic decision-making. This underscores the importance of collaboration across different teams within the organization.

Striking a balance between innovation and a solid understanding of the fundamentals will be key to achieving sustainable growth and success in the coming year and beyond.