The modern CFO in manufacturing and distribution: A guide

In manufacturing and distribution companies, the CFO faces mounting pressures.

These range from a spike in economic uncertainty, to ongoing supply chain disruptions, and a slew of new regulations in areas such as packaging, AI practice, and emissions reporting.

More than ever, companies need finance to adopt a more strategic role to help them navigate volatility and change.

This article delves into the challenges finance chiefs face in these sectors, and how they can develop their roles to overcome these obstacles.

Here’s what we discuss:

Boosting decision support

Finance leaders are increasingly expected to collaborate more widely with other business functions, such as operations and sales, to support decision-making.

But research by Sage shows manufacturing CFOs are underrepresented in this area.

They are less involved in operations (57%) than the average (67%). And fewer than average report significant involvement in strategy and collaboration with the C-suite or board.

Gemma Hogan is CEO at Hawkhurst Accounting and previously finance business partnering manager at Mercedes-AMG Petronas Formula One.

She says to build strategic influence, finance leaders need to develop curiosity about the needs of others across the organisation.

For example, at a previous company, the operations director was known for having little time for finance people.

“The team expected I’d struggle to build any partnership with him,” she says. “Early on, I needed to address the lack of a structured forecasting process, and noticed operations weren’t involved.

“Knowing they must have some version of forecasting to manage raw material scarcity and production bottlenecks, I walked over and asked how his team approached it.

“He looked surprised, then laughed and said: ‘Nobody from finance has ever asked me that.’

“I explained I didn’t want to redesign the wheel, just translate his team’s process into a financial view. He cleared his morning to show me everything.

“From then, that director regularly came to my desk to discuss business issues or invite me to meetings for a finance perspective.

A genuine interest in his world had turned scepticism into trust and built the foundation for true business partnering. Every department should feel that finance is their trusted adviser, not the final checkpoint.

gemma hogan, Ceo, hawkhurst accounting

The best teams develop this trust by turning commentary into actionable insight, using language that resonates beyond finance.

If you have a big enough team, you can even go further by embedding finance staff in operations and commercial teams to transform your engagement with them.

“Once finance is invited, and shows up, in planning meetings, production reviews, and sales discussions, it stops explaining results and starts influencing them,” adds Hogan. “If your finance team is only invited at the end of a process, something’s wrong.”

Keeping up with sector changes

Operating models in manufacturing and distribution are evolving rapidly.

For example, distributors are replacing traditional transactional approaches with value-adding strategies in delivery, supply chains and warehousing.

New tools and methods, such as AI, automated vehicles and Industrial Internet of Things (IIoT) devices, are helping them transform value chains and strengthen relationships with customers and suppliers.

As this transformation accelerates, the finance role is sometimes expanding faster than teams or systems can keep up with in small and medium-sized firms, says Hogan.

“They are expected to maintain control while also driving innovation, often with lean resources. In many SMEs, the finance director or CFO also now oversees information systems alongside finance; and, alongside operations, they need to understand developments in areas such as sales and supply chain technology.”

To tackle these challenges, agility and cross-functional understanding are essential. Finance leaders need to operate holistically, which requires strategic breadth and operational empathy.

Romesh Jeyaseelanayagam, founder of The FD Consultant and co-host of the Strive and Thrive podcast, says: “There is so much change in these sectors—for example, in robotics and artificial intelligence.

“It’s a big challenge for CFOs to keep up. To thrive, you have to keep abreast of changes, embrace them and help implement them effectively.”

He recommends developing change management skills so you can be more involved in implementing projects effectively: “People don’t like change, so you need the emotional intelligence to persuade and bring people on board. If they are contributing to the change, and using it as an opportunity to develop themselves, they are more likely to embrace and see the value in it.”

Integrating ERP systems

Modern enterprise resource planning (ERP) systems, such as Sage X3, can quickly and seamlessly integrate ecosystems linking warehouse management, e-commerce, and IIoT data into a real-time operational view.

“One of my team of finance directors has recently put in a warehouse management system (WMS) with a client,” says Jeyaseelanayagam. “They found a system that worked seamlessly with other programs such as their ERP.

“That enabled real-time operational data to flow into finance.

“For example, they can now validate invoices quickly because the system shows goods received immediately, rather than waiting for paperwork or confirmation from operations.”

That visibility enables us to quickly address problems, such as having too much or too little stock, and see opportunities.

Romesh Jeyaseelanayagam, founder, The FD Consultant

Hogan says real-time data is vital for modern manufacturing and having one version of that information in your ERP drives confident, aligned decision-making across departments.

A single source of truth allows finance, operations and supply chain management to work from the same foundation, eliminating the debate about whose numbers are right.

“With dashboards, the need for manual consolidation and spreadsheet work should be minimal,” she adds. “That shift enables you teams to spend more time interpreting performance rather than compiling it.

“However, not every business needs an all-in-one system. Forcing everything into a single ERP can create rigidity. Often, the best solution is a blend of tools, smartly integrated through APIs.

“Well implemented modern systems don’t just digitise. They enhance consistency, transparency, and control across the organisation.”

Integrated ERPs can also transform how a business operates through:

• Mobile and remote access that gives teams visibility and control from anywhere.
• Improved traceability and governance, reducing duplication and error through shared data structures.

Combining these benefits with genuine cross-functional collaboration enables CFOs to develop their role as a central coordinating hub, driving these all benefits for the business.

A 5-step action plan

As finance leaders ready themselves for these challenges, here are five ways to keep ahead.

1. Develop your interest in operational needs and foster cross functional collaboration to enhance your strategic input. For example, aim to help identify new opportunities and improve efficiency in your supply chain.
2. Reinforce your strategic acumen. Get invited to operational and leadership meetings, and show up with new ideas and genuine insights.
3. Develop softer skills such as empathy, listening and emotional intelligence. You may be partnering with areas of the business, such as the factory floor or warehouse, with a different outlook to your own. Listen to and understand their needs and problems clearly before making any suggestions.
4. Carefully identify which AI and automation projects will provide return on investmentthen accelerate them. Sharpen your team’s data literacy skills so they can offer better strategic analysis.
5. Adopt integrated systems such as ERP and warehouse management. Connect financial and operational workflows to increase line of sight across the business. Make informed decisions quickly with real-time data through integrated ERP dashboards. Modernise your systems with a cloud-native, integration-ready platform that can help your business scale with security and agility.

Final thoughts: Wider ecosystems can support your role

This article has examined the pivotal role CFOs in manufacturing and distribution can take in driving innovation and operational efficiency for their organisations.

It also underscores the crucial role integrated systems such as Sage X3 can play in this journey.

As well as using open APIs to allow seamless integration with other third-party software and hardware, Sage has expanded its ecosystem to support its worldwide partner community.

This enables partners of all sizes to work together to solve customers’ increasingly complex business problems.

With such powerful ecosystems behind them, finance leaders have vast opportunities to drive strategic growth and expand their influence. With the right skills and mindset, the prospects for adding value are bountiful.