Recession Aftermath Continues to Morph CFO’s Role
With the recent recession forcing many credit unions to tightly manage expenses to maintain the bottom line, the role of the chief financial officer has continued to evolve.
That’s according to a new CUNA CFO Council white paper that looked at expense management practices, which go beyond budgeting to encompass strategic planning, process improvement and revenue generation.
The research for A New Era in Expense Management is based on information gathered from CFOs, other financial executives and consultants.
Some credit union leaders stressed that expense management should focus on adding value to operations.
“I’m not as worried about increasing costs that will generate revenue or improve the member experience, as opposed to additional expenses that aren’t value-added,” said Michael Hadzipanajotis, vice president of finance for the $356 million MIT Federal Credit Union in Cambridge, Mass. “I always need to think, ‘Is this good for the credit union?’”
As economic conditions improve, the CFO’s leadership role will include examining whether proposed expenses are justified based on the ability to generate revenue or enhance operations, according to the white paper.
“If you use expense management and the related controls the right way, then you set the tone and this approach becomes a permanent analysis tool,” said Kenneth Heydt, finance manager/controller at the $1 billion Utilities Employees Credit Union in Reading, Pa.
Heydt said as credit unions move forward from the economic challenges that dominated the last few years, this approach can become a building block for returning to financial success and gaining stability.
“If we retain our focus on managing expenses through the good times, you'll be able to get through the bad times,” Heydt said.