We are excited to share a special episode of CFO Weekly, featuring our own Max Dame, Vice President of Finance and Operations at Tesorio. This episode offers an in-depth look at the evolving role of AI-driven CFOs and their impact on financial strategy and operations across industries.

In the podcast, hosted by Megan Weis, Max explores several crucial topics that are reshaping cash flow and financial leadership today. Key points include:

• The role of AI-driven CFOs in net cash flow optimization

• Why CFOs should embrace technology and AI

• The three pillars for successfully transforming financial health

• Cash flow optimization strategies in the current economic landscape

• AI's impact on the future of finance

Tune in to hear how AI-driven CFOs are optimizing net cash flows and how Tesorio’s leading-edge Cash Flow Performance platform is driving innovation in finance.

Listen to the podcast at CFO Weekly.

Megan: Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results. This podcast is brought to you by Personiv, the trusted leader in finance and accounting outsourcing for over 30 years, see how Personiv’s customized solutions can help you streamline your operations with teams that start as small as one. Visit the website at Personiv.com to learn more. I'm your host Megan Weis, let's jump right in. Today my guest is Max Dame based in San Francisco. Max is a seasoned Financial leader who currently spearheads finance and operations at Tesorio the leading Cash Flow Performance platform. Max thank you very much for being my guest on today's episode of CFO Weekly.

Max: Thank you, Megan. I appreciate it. Happy to be here ,super excited about this.

Megan: Today our discussion focuses on the AI-driven CFO and how that relates to net cash flow and the three pillars of financial health. Max, I'm looking forward to hearing your perspective on this topic and learning from your experience so let's jump right in.

Max: Sounds great

Megan: First, let's just start with a little bit about you, your background, and how you got to where you are today.

Max: Absolutely. My background is mostly in FP&A so I, quote unquote, grew up in FP&A at large corporations, including QVC which was part of Liberty Media and then moved to a large multinational, Schneider Electric, a French company, and then about seven years ago or so, I moved to smaller startups and led finance functions there including Tesorio where I'm at today. And why did I do that? The work at startups, to me, is a lot more exciting than big corporate which also has its excitement. But working in these kind of faster moving environments fits my style pretty well so yeah that's how I got to where I'm at.

Megan: That's awesome. I was going to ask you what you liked about working for startups.

Max: It's the fast pace, and some of it is also the unpredictability. It definitely keeps you on your toes.

Megan: So Tesorio was named as one of the Fast 500 winners and is one of the fastest growing companies in America. Is this because the company is doing something different from anything being provided before? Or do you guys just do it better than anyone else?

Max: Yeah, we're very flattered by this award. So thank you very much. I think it's a little bit of both. One, we definitely do something that's very different that hasn't been done before. We help CFOs and finance leaders optimize their cash flows. That's all the way from their cash collections to their accounts payable. And also help them with bank forecasting–that's something that hasn't been done before and we're doing that a little bit differently. We're focusing on short-term Cash Flow Performance, we call it, versus kind of the standard FP&A kind of longer ranging tools that you see out there in the marketplace. So very different. Something brand new or it was brand new when we released it and we continued to innovate and we have a lot of exciting stuff coming out this year as well.

Megan: I'm just curious, who's the ideal customer for this product?

Max: The ideal customer is anyone in the finance leadership position, anyone in charge of short-term cash forecasting. In addition to that, our collections automation tool helps AR Directors and accounts receivable professionals collect faster. So it's really any finance leader in a medium to large company.

Megan: And looking back at your time with Tesorio, which I believe you started in 2022?

Max: That's right, yeah, it's been almost two years.

Megan: So what's been the decision that you've made during this time that you're most proud of and that you think contributed most to Tesorio’s remarkable success?

Max: That's a great question. I laugh because I'm not one toot my own horn but I think it's a combination. It's a few decisions that I made or I helped the team make, in a relatively small company like ours Venture backed startup, there's a lot of initiatives that the team wants to move forward with and one of my biggest accomplishments in my role was helping the team focus, focus on our mission and making sure that we deliver on our mission. Again, there's always 15,000 different initiatives, whether it's product, engineering, sales…everyone has great ideas and I see it as my role to make sure that we move forward with our mission and stay true to that. And that's been a struggle at times but I think I've been pretty successful at it and the results are in the pudding. We've had a fantastic 2023, we ended the year on a really good note and things are going very well.

Megan: I'd like how you give credit to the team, it's a good leader. And recently, I've heard CFO referred to as Chief Future Officer, among other things, so what responsibilities do CFOs have now that maybe they wouldn't have had 5 to ten years ago?

Max: Yeah, I think that's interesting. I think the CFO or finance leader moving to a more strategic role quote unquote—that's been going on for 10, 15, 20 years probably. So that's nothing new, but over the past five years, what has changed to me it's the demands on the job and the demands on the position have changed. Where in the past you could say, “Hey you know we're closing the books you need to wait for an answer to a request until we're done with the numbers”. There's a long process, you don't really have that luxury anymore. You have to move fast and you have to have the answers at your fingertips and that's something that's really changed. Another thing that has changed, I feel there's a lot more responsibilities in the job than there were in the past. Many finance leaders and CFOs today have a lot of operational responsibilities that were in other departments or had other leaders previously. An example of that would be human resources, legal, deal desk, potentially. Those types of roles in the whole scheme of simplification moved under the office of the CFO in many cases. So many CFOs are de facto COOs at this point and that comes with a lot of additional responsibility and also risk.

Megan: And in addition to more responsibilities, it seems like CFOs are constantly being asked to do more with less, so do you think there comes a point where you can't squeeze blood from a stone? or is there always room for improvement? Especially now that we have tools like Automation and AI.

Max: I laugh because I love that question and the way you phrased it. I don't feel like we are necessarily being asked to do more with less. We are asking the organization to do more with less and in turn, we kind of force ourselves to do the same and lead by example, which we're really tough on ourselves and, in some cases, definitely to a fault where, hey, we want to lead by example. We don't necessarily want to spend incremental dollars where there are instances where we just have to invest. We have to invest in new systems, due processes, and sometimes people as well. But many finance leaders are very shy about that because, again they want to lead by example. We have a very lean team, but that can be to a fault where you're missing out on improvements that you could make if you were to invest a few dollars. So to make a long story short, I don't necessarily feel that we're always being forced to do more with less. But we're imposing that on ourselves, which I wish people wouldn't always do.

Megan: And with such a large focus on technology these days within finance and accounting, do CFOs need to be experts in technology and AI?

Max: I don't think there's anyone who can claim to be an expert in AI at this stage, quite honestly. Do CFOs need to be experts in technology? In some instances, what I would say is that folks need to be aware and very curious, no matter if you're leading a very large organization at a large corporation or you're leading a lean and mean team at a startup. I would want leaders always to be very curious as to what's out there, what's new, and not be shy trying out new things. And I think that's something that's become a requirement, especially over these past five years where technology is moving very very quickly. Us as leaders, we need to be there, and understand what's out there and spend a good amount of time testing new things and not be too risk averse trying new things out. Of course, in our jobs, we always have to be careful and balance risk versus potential ROI or cost savings, but it's absolutely up to us to be part of the sea change that I see coming. So definitely be aware of things and not be afraid of trying new things out.

Megan: Do you have any advice or maybe sources that you look to to stay ahead of the technology curve?

Max: Absolutely. Obviously, the typical thing, read up on things as much as you can but for me personally, I actually like to try, trial new tools, watch demos myself rather than asking my team to do it. When ChatGPT came out, I played with it a lot and I actually use it almost every day in my job for certain things. And I would encourage leaders no matter what your organization looks like or how large your organization is to do the same. I think trying things yourself educates you the best rather than just reading up on it and watching webinars and doing things of that nature. Try it out and see if it works for you all.

Megan: And Tesorio is a Cash Flow Performance platform, so why is cash flow so important, especially right now, and given its importance how is it that so many companies seem to lose sight or control of their cash flow?

Max: That's a great question. Why is it so important right now? I think it's always been important but especially since what happened in 2023, the banking crisis venture funding landscape changing pretty dramatically. We haven't seen that change like this probably in the past 10 years so this is something a lot of folks have experienced for the first time in their careers. So cash is not easy to get or not as easy to get as it was in the past.

So having visibility, predictability, and control over a cash flow is incredibly important and much more important than it was just two or three years ago. And with that comes, you really need to have a very good understanding of where you stand in terms of cash, your cash burn, your cash ins and outs at any given time you can't wait for the books to be closed or for quarter end or these data driven milestones. Even as the most senior finance leader you almost need to have a daily view of where you’re standing and that's become incredibly important especially these past 18 to 24 months.

Megan: And how can AI help with cash flow and give CFOs back some control over forecasting?

Max: Yeah, absolutely. I can give an example short-term forecasting, for example, a 13-week or quarter cash sources and uses forecast is one of the most tedious time consuming and labor intensive things that a finance department is working on at any given time. And that is a fact, we've done some research and some surveys and it is a very manual process in 90% of organizations today. And the reason for that is especially short-term cash forecasting, is there's huge variability when are customers paying you, do you have control over when they pay you, what bills are becoming do, when payments terms change, when you paying those bills…it is quite complex and there's a lot of different sources for the data. 

What we're trying to do is we're trying to simplify that and an example would be, hey, if you have a few thousand customers and there's one customer in there that always pays you 20 days late, there's another customer in there that always pays you five days early, trying to forecast that in the thousands is a very convoluted process. Try to do that in spreadsheets. It's possible, but it takes a long time. It's very complicated. AI can do that in seconds and provide you with the most accurate and up to-date cash in forecast that you can imagine. And that's something AI can do and we're there today, which is pretty exciting. this is a process that would have taken you probably a week and now you can do it in seconds.

Megan: And are there metrics that AI considers that are difficult for human analysts to take into account? In other words, are there external factors that people will likely miss that AI takes into account?

Max: Yeah, that's an interesting question. So one thing I will say AI cannot predict, at least not yet, when the next recession is going to come, when the next banking crisis…I wish it could, that would be fantastic. We're not quite there yet and I don't expect that to happen anytime soon but what AI and ML power tools can help you with is no matter what crisis comes around the corner, you're ready. You're ready with visibility, predictability, and control. And that's what AI can help you with. You don't have to wait for your treasury and/or your FP&A team to come back to you with a forecast in five days or two weeks because they have to quote unquote rework the model. You can get that information by the click of a button and you can action it as well. So while you can't necessarily predict exactly what's happening in the economy, at least you can be ready for anything that comes in.

Megan: And you mentioned three pillars of fiinancial health, so what are the other pillars beyond cash flow?

Max: Absolutely. What we've been talking about quite a bit, and again this comes from a lot of research we've done with CFOs, what's really important, especially this year is visibility. So removing some of those blind spots, not having to wait for the books to close, etc. Then I mentioned the second one was predictability, being able to see around the corner, not be blindsided. And then control, really being able to take action. It's somewhat self-explanatory.

Finance leaders always want to be in control and they think they're in control but they're not always in control. So really giving them the tools and having the tools in place so you can take fast action in case something happens that you couldn't see. And those are the three things that we're focusing on and we hear finance leaders will focus on in 2024.

Megan: And what role does AI play in measuring these other pillars and aiding CFOs in keeping everything looking healthy?

Max: Yeah, absolutely. I think all three of those that I mentioned are definitely helped by AI and ML quite tremendously. So when you think about visibility, AI can see patterns right? So you can very quickly get insights into your financial data that in the past would take an analyst or data analyst hours to build dashboards, analyze those dashboards. AI can give you insights very very quickly. That's a sea change–that's happening today. 

Predictability is the other one I mentioned, this is again–this is being able to see around the corner and that's where that pattern recognition comes into play. An example for that would be if you have a large customer base, let's say you have 20,000 customers and a subset let's say 25% of those customers are in a certain segment industry segment and you see that those customers are starting to pay late very quickly. AI can see a pattern like that and alert you like, hey, this industry is potentially in trouble or this customer sub segment is potentially in trouble make sure you remind them. You run a campaign against them to make sure that they pay you on time. In addition to that, you could alert your sales team that is in charge of the segment to say, “Hey, you might want to do something different with these people and or focus on something else because there could be trouble ahead”. This is something with the old school kind of legacy tools you would not have been able to do without building complicated dashboards. And honestly having an army of analysts pouring over data for a number of days and then doing a PowerPoint presentation to share the results. So this very different.

And then last but not least, it's what I mentioned earlier. It's control–being able to act on something. So again, for example, back to the example where a subset segment of your customer started paying you slow what you could immediately do you can run a campaign against those customers and send out thousands of emails at click of a button and remind them to pay on time to improve cash in from those customers. And having that type of control again it's real time, it's super fast, it's not something that you have to wait weeks and months for somebody to action.

Megan: And I'm sure you just touched on it but can AI tools provide CFOs with more than just figures and quantitative data in other words can they make recommendations for what action should be taken based on insights that have been gathered?

Max: Yeah, absolutely. I think two things on here. One, these large language models they're really great at predictive text so they're really great at writing so I'm just thinking of a classic example would be an MD&A management discussion analysis that a lot of us have to write every quarter. AI can absolutely do really really well with this and help compose summaries with insights it gets from the data and make that process a lot easier.

Of course with the caveat human checks are always necessary you always have to check the work and make sure that it's all proper and there's no hallucinating going on–but that's already possible today. But more interestingly I feel dashboards and data visualizations and all those things have been around for many years. Surfacing data has been around for a long time they've gotten better of course, easier to produce etc.,but what finance leaders are always stuck with is with a so what? What do I do with this data? I have all these stats, all these metrics, all these dashboards–what do I do with that?

Again that's where the pattern recognition really comes in. AI can really help pinpoint focus areas like this is again a sub segment of your customer base that is potentially having issues, that's something you should focus on. Those are things that analysts a long time and AI can go through the data in seconds and provide you with those insights and actionable recommendations. And that's new, that wasn't available just a few years ago. I'm pretty excited about this. People always ask like, “Hey, will this replace humans? Will this replace analysts or accountants? Whatever it might be, I don't think so. I think it will change jobs for sure. And jobs will become become more interesting actually as a result of this because again you can take a lot more strategic action rather than just producing numbers which, yeah, I think it's quite exciting–it's a very exciting time to be in finance.

Megan: Yeah, it definitely is. I can't wait to see where we are three to five years from now.

Max: Absolutely, it's going to be a different world.

Megan: So last question, but as you look into the future is there anything that keeps you up at night? Are you worried at all about what's around the corner?

Max: Oh, that's a great question. You know what Megan, sleep is very important to me so…

Megan: To me too.

Max: I sleep most nights very well at night. So that's the answer to that, but is there anything worrying? Honestly I'm an optimist, I'm super excited of what's ahead, what some of these tools can do, how jobs will change…I'm not super worried about things going away I just think things will become more interesting and more efficient.

So yeah it's an exciting time. I don't think we've seen a sea change in technology like this in our lifetimes. Spreadsheets have been around since before most of us were born, but this type of intelligence quote unquote has never been available to us so I just think it's exciting.

Megan: I agree Max. Thank you so much for being my guest today.

Max: Of course, my pleasure, and thank you so much for having me.

Megan: Yeah, I've really enjoyed speaking with you and thank you for finding the time to be here with us today to share your experience and knowledge and I wish you and Tesorio all the best.

Max: Thank you so much and same to you.

Megan: And to all of our listeners, please tune in next week and until then take care.

Curious how you can manage your cash flow with AI? Contact us to a cash flow expert.