Qualities of the Forward-Thinking CFO or Controller

Chief financial officers and controllers today have more responsibilities than ever. Even in smaller and mid-sized companies, every operation, whether it’s front or back-office, is inexplicably tied to investment versus reward. The forward-thinking finance leader has to visualize a future-proof organization. This immediately steps into the operations and technology arenas, but it’s necessary.

So, where can you start? Right within the finance organization.

Modernize Finance and Accounting

The speed of business compels organizations to respond with systems in place that can reduce manual processes, eliminate errors, reduce risks, and elevate the team so they are working on real, strategic challenges instead of frustratingly transactional ones. The technology now exists to run a lean, efficient finance operation, but it’s up to management to instill modernization into the ethos and make it a priority.

At Tipalti, one of our promotional giveaways is a bounded journal made with ledger paper. The idea is that there’s really no use for ledger paper except to recycle it for note-taking. Financial operations are digital now and for the foreseeable future. To cling to old methods that do not embrace the digital world is nostalgic, but a terrible business practice. Accounts payable often seems to be the last of the late adopters—conducting operations by accepting paper invoices and responding with paper checks.

Cultivate Homegrown Capital

Why should finance be a cost center? As an example in an organization, it should be able to identify ways to drive down the cost of the operation to either neutral or even turn a small profit. In the past, this was normally impossible since any idea likely couldn’t be scaled properly. It might even cost more to run revenue programs from finance than the actual savings. But with software tools today that dream can now become a reality.

Take the realm of dynamic discounting and early payments as a point of illustration. It used to be a requirement to manually and individually vet, invite, and manage supplier payment terms that would benefit both sides. Because of how challenging It was, the effort was primarily reserved for top dealing suppliers. Now, it can be achieved at scale to the entire supplier base simply by automating much of the negotiation and offer processes.

Acting with Data and Analysis

Once modern systems are in place, not only are processes smoother, but you end up with more data—data about transactions that used to happen in silos. And the best use of that data is to start optimizing further. Maybe the optimization comes from identifying ways to reduce transaction fees. Maybe it’s honing in on the speed of transactions. Maybe it’s simply finding ways to save some money on currency conversion. Those are all tactical.

But maybe, what is revealed in the data are new channels for the organization to operate in. Or even new business models that might enhance the monetization strategies within the company. Maybe that data becomes an early indicator of what is working and what is not. Suddenly finance can see into the pulse of the business.

Addressing the Elephant in the Room

“No way! If we modernize, people will lose their jobs.”

There’s a fear that exists about how automation is coming for our jobs. It’s the same type of fear that was voiced when spreadsheets were introduced. Spreadsheets were deemed the end of all accounting jobs. That certainly hasn’t happened. In fact, spreadsheets today are the most indispensable tool for finance and accounting because they’ve removed rudimentary tasks of calculations enabling higher level functions around analysis.

Modernization of finance operations will yield some turnover, particularly in lower level functions. But the next generation of knowledge workers will not be training to do those jobs anyway. Instead, why not take that available headcount and promote them to focus on more strategic goals or organic analysis, rather than transactional processes? You’ll be elevating the entire organization in the process.

Automation is not going to stop. It is coming whether you like it or not. Which brings up an important existential detail: Your competitors. They will be looking for an advantage. They’ll be looking for faster, more accurate approaches to create winning scenarios and streamlined operations. They will eventually find automation as part of the mix. The question is, do you flop or do you adopt?