Tesorio and Tipalti recently surveyed 160 global CFOs on how to future-proof finance operations in a new survey report, “How CFOs Are Navigating Change”. Tesorio, an A/R Cash Flow Performance Platform, and Tipalti, the leading Global Payables solution, hosted a webinar, "Future-Proofing the Finance Function: Connecting People, Processes, and Technology," analyzing the survey’s key findings. The panel of experts, which included Jack McCollough - President of the CFO Leadership Council, Hope Cochran - Managing Director at Madrona Venture Group, Alex Cedro - VP of Finance at Tipalti, and Max Dame - VP of Finance and Operations at Tesorio, delved into the changing role of CFOs, how to future-proof financial operations and the crucial role of a Connected Finance organization.

The Role of the CFO is Evolving

Technology's evolution has always played a crucial role in the modern business environment. In recent years, its significance has become even more prominent, particularly for finance teams. In light of the growing emphasis on data and analytics, finance leaders must be more tech-savvy and prioritize technology, thinking more about strategy and less about debits and credits.

"The CFO needs to be more tech-first as companies are relying on data and analytics more in their organizations,” Hope Cochran explained. "You want to make sure your numbers are right...you start finding yourself doing things out in Excel and then hard-coding the GL with the answers. And that's just asking for errors in the numbers."

The CFO’s focus has become increasingly strategic over time, with an emphasis on efficiency as finance teams are being asked to do more with less. They are being asked to have a seat at the decision-making table to ensure that key decisions align with the short- and long-term growth strategies of the company. Hope mentioned, “The KPIs have to make good logical financial sense, investments have to have good ROIs, and ultimately cash is the constraint — so utilizing that cash in the best manner becomes more and more important.”

Investing in Technology Should Be Non-Negotiable

In the CFO Dive survey, only 29% of CFOs say that their companies have invested in automating accounts payable, and even fewer, 25%, say that they have done the same for accounts receivable automation. Future-proofing an organization requires the use of intelligent technology that automates financial processes.

Not all CFOs, however, have adapted to this change and adopted smart solutions. Outdated manual processes and technology can make it harder for finance teams to be successful because they are bogged down with tedious, monotonous tasks instead of strategic initiatives that could have a big impact. And as a consequence, finance teams are encountering slower business processes, inaccurate financial data, and high accounting staff turnover.

Max Dame said, “Finance leaders need to be prepared to manage the effects of a downturn or a recession... quick access to data is essential," which will help teams to better predict cash flow, optimize working capital, and find ways to save money.

The importance of accurate data and cash forecasts cannot be overstated. Today, the focus is on increasing working capital and extending cash runway to have at least 24 to 36 months' worth of cash on hand. Finance teams cannot afford the risks that come with forecasting from spreadsheets that are bound to have errors.

Retaining and Attracting Talent is Key

One of the biggest challenges to finding talent and ensuring continuity in the accounting industry is the shortage of accountants. The research found that 72% of CFOs have experienced higher-than average turnover in the past two years, with outdated manual processes and technology being the top pain points for CFOs’ new hires (54%)

The younger generation, particularly Gen Z, is more technologically savvy and will not settle for outdated processes. Jack McCullough discussed the challenges, saying “It's virtually impossible to hire Gen Z. If you don't have a really thoughtful strategic digitization process, they don't want to work for a company and give up a couple of precious years of their career to a company that they perceive as technologically backwards.” The future of accounting teams will depend a lot on whether or not they have the right tools to maintain and attract talent.

Connected Finance is The Future

This mix of individuals, procedures and AI solutions is known as Connected Finance. This new approach to finance strengthens the integration of technology, workflows, data, and people, enabling organizations and individuals to make more confident and in-the-moment decisions. Implementing Connected Finance can help finance teams paint a clearer picture of the business's future and make confident data-driven decisions. All of the panelists agreed that businesses can be as efficient as possible and do well in any economy if they step back and look at how these key parts work together.

Technology's significance for finance teams has never been more evident. Digitization is key to optimizing back-office workflows and producing real-time data. CFOs must prioritize automating complicated Excel spreadsheets and invest in the team and technology to empower them.

Ultimately, the future of finance lies in leveraging technology to be prepared for the unexpected and embracing a Connected Finance approach to succeed in a rapidly evolving macroeconomic environment.

With increased demands on finance, do you have the tools and systems in place to future-proof your finance function?

Contact Tesorio today to learn how you can start taking control of your cash flow.