Visa Acceptance Solutions 2024 Global Digital Shopping Index Mexico Edition May 2024 Banner

What the Future of Work Means for CFOs’ Budgets

office space, working

Over $38 billion of U.S. office buildings face loan defaults, foreclosures or other distresses. At the same time, many companies are relocating or centralizing their headquarters.

That’s why, for today’s CFOs, the cost and cultural balance around return to office versus remote work and other hybrid setups is top of mind as businesses look to unlock sustainable growth and profitability.

Increasingly, the calculus is changing as business leaders look to realize efficiencies and answer pressing questions around internal spend. 

After all, where a business spends its money is one of — if not the greatest — determiners of its growth strategy and road map. Remote work significantly altered the way CFOs managed their budgets, and a return to office could end up doing the same as CFOs reconsider their budget allocations for office space leases, maintenance, utilities and related expenses.

That’s because, as the CFO role continues to evolve, modern CFOs are now front and center in strategic planning and execution. CFOs both continue to, and increasingly do, play a crucial role in strategizing and managing business expenses.

Against today’s dynamic macro backdrop, finance departments are increasingly embracing innovative budget strategies to support evolving work models, enhance employee experience, ensure workplace safety, and drive overall organizational success.

Read more2024’s Top Trends CFOs Need to Know

Every Business is Different but Most Want Similar Balance Sheets

While the fundamentals of businesses in different industries are challenging to compare, and even within the same industry no two companies are the same, today’s CFOs and finance teams typically have several key goals that remain consistent regardless of the industry they operate in. 

That’s because CFOs are responsible for ensuring the financial health and stability of their organizations. This includes managing cash flow, optimizing capital structure and maintaining adequate liquidity to support day-to-day operations and long-term growth initiatives; as well as aiming to optimize the allocation of resources and minimize unnecessary expenses to improve profitability and operational efficiency.

The question of office space, whether it is purchased or leased or built, is a key cost center for many firms.

“From a CFO perspective, payroll is the largest P&L line item,” Milan Parikh, CFO at workplace equity platform Syndio, told PYMNTS in an earlier interview, “and when you have happy employees, you have a higher retention rate. The number one thing you want to take care of is your own employees.”

See also: How a Six-Decade Old Management Framework Helps Today’s CFOs Thrive

CFOs are responsible for identifying, assessing and mitigating financial risks that could impact the organization’s performance or reputation. This includes managing risks related to market fluctuations, regulatory compliance, cybersecurity threats and other external factors, as well as implementing internal controls and governance frameworks to ensure compliance with legal and regulatory requirements. And it also includes office space decisions.

“I’ve always tried to integrate the whole financial planning process with the strategic planning of the company, making sure that they are integrated and optimized to work together in the best way … the financial budget needs to be working toward the company’s goals in a very explicit way,” Jeff Bray, CFO at Semperis, told PYMNTS.

As Bloomreach CFO Ninos Sarkis told PYMNTS in an interview posted in November: “You can’t control the geopolitical tensions, but what you can control is making your business stronger and more resilient during these times so that you come out the back of it a stronger company … There’s a lot of relatively low-hanging fruit.”

Read also: Google’s Restructuring Shows AI’s Impact on Finance Function

Top chief financial officers have continually emphasized to PYMNTS during the “Day in the Life of a CFO” series that talent acquisition, retention and development remain the backbone of any successful company — and increasingly, office policies are playing a role in personnel strategies.

“Our greatest asset is our team and their time,” Matthew Mandel, CFO and chief operating officer at Fleetio, told PYMNTS. “I’m a strong believer that it takes people with different functional expertise coming together to drive good outcomes.”

“Part of the tough job of the CFO is capturing the ambition of an organization’s growth wants and needs and putting that into a financial basket that makes sense, one that you can plan against and resource against,”  Provi CFO Kevin Price told PYMNTS.

Ultimately, the ongoing questions around return to work or remote work require CFOs to adopt a more flexible and adaptive approach to budget management, reallocating resources while simultaneously identifying opportunities for cost savings and efficiency improvements. 

As just one data point, PYMNTS Intelligence reveals that businesses contemplating the transition to a remote workforce should prepare for possible increased fraud-related headaches.