Unlocking Financial Insights: How Manufacturing CFOs Can Do More and Spend Less

Finance leaders in manufacturing are under pressure to stretch limited resources further than ever as they contend with evolving investor expectations, supply chain disruptions, talent sourcing, rising costs, tariff volatility, and the urgent need to improve cash flow. To do so, they need real-time insights for smarter decision-making.

But one of the biggest roadblocks to finance transformation in manufacturing is cost. Unlike higher-margin industries like tech, manufacturers must justify every dollar spent on systems and automation.

Yet, many middle-market manufacturers still rely on disjointed systems and spreadsheet-heavy reporting, resulting in delays, inefficiencies, and heightened risk due to inaccessible, outdated data.

While it’s tempting to think a new ERP is the silver bullet, that’s not always the answer, especially for businesses in which margins are tight and disruption must be minimized. Today’s manufacturing CFOs need practical, cost-effective ways to modernize finance without huge expenditures.

Why It’s Time to Upgrade Your Finance Function

Finance teams at manufacturing companies face unique structural challenges that make technology transformation imperative: the complexity of physical operations, distributed facilities, and high volumes of transactions relative to other industries. These challenges force CFOs to address:

• Economic headwinds and policy uncertainty: Rising input costs, global supply chain turbulence, and shifting U.S. trade policy make it harder for teams to forecast, manage costs, and plan with confidence. Want in-depth analysis and actionable recommendations for today’s economic environment? Explore the full CFO report here.
• Inaccurate costing methods: Many manufacturers rely on outdated or overly simplistic costing models, leading to distorted margin analysis and misinformed pricing decisions.
• Financial reporting bottlenecks: With data spread across production, inventory, and various ERP systems, it can take weeks to close the books and generate reports. By then, insights are already stale.
• Lack of visibility: Siloed systems make it challenging to view performance by product line, customer, or plant, which blurs operational decisions and pricing strategy.
• Manual data entry and reconciliation: Finance teams spend hours gathering and cleaning data from spreadsheets and disconnected tools, leaving little time for value-added analysis.

Building a Finance Function That Scales: Where to Start in Manufacturing

So how can CFOs modernize their finance functions while capturing the critical metrics quickly and with minimal disruption?

The key is to focus on targeted, incremental improvements that deliver insights today. These quick wins lay a scalable, de-risked foundation for a potential future ERP, BI, or CPM implementation when the time is right.

1. Simplify Trackable KPIs

Before investing in new tools or automation, it’s critical to first define what you need to measure. One of the biggest mistakes is trying to track everything. Complexity doesn’t scale. Simplicity does.

Here is what matters most:

• Cash conversion: How efficiently are you turning revenue into cash? Track days sales outstanding (DSO), inventory turns, and payables.
• Cost structure visibility: Understand fixed vs. variable costs, labor efficiency, material usage, and how overhead is being allocated.
• Product and customer profitability: Know which products, customers, or plants create value and which are a drag on margins.
• Forecast accuracy: Are your revenue, margin, and cash flow projections consistently reliable? Misses here ripple through the business.
• Working capital trends: Monitor shifts in inventory, receivables, and supplier terms that may indicate liquidity challenges ahead. Early visibility into where cash is tied up is critical for proactive management.

By focusing on the metrics that matter – and ensuring the underlying data is accurate and accessible – finance leaders can drive sharper insights without overwhelming their teams or systems.

2. Optimize Your Costing Methodology Before Automating Anything

Does the current costing methodology obscure rather than reveal insights into drivers of profitability? A successful costing methodology should be tailored to mirror the firm’s specific manufacturing activities, without being overly complicated or burdensome. If these costing methodologies are too simplified or complex, reporting will always suffer.

• Evaluate current costing methodology: Standard, actual, or hybrid? What’s working and what’s not? Small adjustments can go a long way.
• Ensure accurate overhead allocation: Are labor, materials, and indirect costs properly assigned? Are you over- or under-absorbing costs?
• Pressure-test margin accuracy: If you can’t trust margin by SKU, customer, or plant, it’s nearly impossible to steer the business.
• Integrate costing and operational data to financial planning & analysis: Operational data is often a leading indicator into financial performance. Does the operational data you capture enable you to speak to the drivers of financial performance? Learn more: CrossCountry Consulting’s proprietary reporting and analytics framework integrates key financial and operational data from across the enterprise and surfaces insights into business drivers, new value-creation opportunities, and prescriptive analytics.

Accurate costing information is the foundation for decision-making. If it’s wrong, even the best dashboards won’t lead to better decisions – just faster bad ones.

3. Develop Manufacturing-Specific Reporting

In manufacturing environments, operations often span across facilities, systems, and shifts, making access to timely, accurate data critical but elusive. Many manufacturers operate with fragmented systems that separate financial, production, and inventory data, proving a challenge to CFOs trying to get a clear view of performance.

While fragmented data spread across various systems might suggest that a complete tech overhaul is necessary, a data warehouse strategy can offer a cost-effective, scalable, near-term solution.

This approach consolidates data from various sources and enables real-time reporting while minimizing disruptions. CFOs can then focus on improving and stabilizing processes, which will set the company up for success if the decision is ultimately made to upgrade and consolidate systems.

• Maximize existing applications: Leverage your current systems to maintain consistency, reducing the need for additional investments and the hassle of implementing a new application.
• Integrate financial and operational data: Seamlessly combine information from multiple systems to create a single source of truth.
• Automate reporting: Implement automated dashboards and reports that transform raw data into actionable insights, allowing your team to focus on analysis rather than compilation.
• Real-time performance tracking: Utilize real-time production data to monitor performance by product, production line, or shift.

By automating data transformation and reporting, finance teams can shift from manual data management to strategic analysis, driving better business decisions with timely, accurate information.

Future-Proof Finance in Manufacturing Without Incurring More Overhead

CFOs can modernize finance while controlling costs by:

• Identifying the key drivers of your business and ensuring you’re measuring what truly matters.
• Prioritizing costing before investing in reporting or new systems.
• Implementing data integration to leverage existing systems instead of replacing them.
• Using automation tools to free up finance team capacity and reduce manual work.
• Leveraging outsourced expertise to build scalable solutions without full-time hires.

CrossCountry Consulting specializes in scalable finance transformation for manufacturing and industrial companies without draining cash flow or creating more complexity. For support with costing, reporting, implementing technology, or gaining real-time data visibility, contact CrossCountry Consulting today.