Bob Purcell is CFO of Lawrenceville, New Jersey-based Billtrust, a B2B order-to-cash software firm. Views are the author’s own.
It’s easy to become enamored with all the tools that promise to revolutionize our world. CFOs and financial leaders, in particular, find themselves at the forefront of this digital revolution, tasked with harnessing the power of data analytics, artificial intelligence, and blockchain technology to optimize financial strategies and streamline operations. Yet amid all this technological fervor, it's essential to remember that the most valuable asset any CFO possesses remains distinctly human: the ability to connect, empathize and build relationships.
This harmonized approach signifies a broader, growing understanding: that in challenging economic landscapes, the knowledge, dedication and adaptability of an organization's human capital are its most potent tools.
The modern CFO: a steward of business relationships
The primary role of the CFO has historically been to optimize cash flow and minimize financial risk. But as we usher in a new generation of financial leaders, finance chiefs are no longer just custodians of financial data — they’re stewards of relationships. They understand that even as technology accelerates financial processes, the importance of human connections cannot be overstated.
One key approach is the strategic cultivation of vendor relationships. Many CFOs are realizing that in times of economic turbulence, strong partnerships with vendors can be a lifeline for their businesses. This entails more than just transactional interactions — it involves open lines of communication, trust and a shared commitment to each other's success. CFOs are actively collaborating with their vendors to identify cost-saving opportunities, streamline operations and ensure the growth of both parties.
Moreover, CFOs are embracing a holistic approach to financial management. While cost management is undeniably crucial, they also recognize that their skilled workforce is a strategic advantage. They are investing in their employees, recognizing that a committed and adaptable team can weather economic storms, pivot to new opportunities, and drive innovation. This approach not only ensures the stability of their organizations but also positions them to seize new opportunities that arise during times of uncertainty.
Treating technology as a booster — not a replacement
None of this is to diminish digitization’s impact. AI and automation have had a monumental effect on finance departments.
When you look at the order-to-cash (O2C) function alone, you can see how they’re empowering businesses to accelerate cash flow and guard themselves against the effects of mounting macroeconomic pressures. This has been a major boon for CFOs and financial leaders, giving us a leg up even in the most challenging economies. But it’s essential that we continue to complement these capabilities with a human touch. In fact, it’s when we strike this balance that we see the most success.
Let’s revisit digitization’s impact on O2C and use the collections department as an example. This is a function that’s a top priority for CFOs at the moment as a potential recession increases the inevitability of longer days sales outstanding. It has also historically been an unsympathetic process. However, as the world becomes more interconnected and customer expectations evolve, it's increasingly important to approach this task with empathy and a human touch.
Advanced data analytics and AI-powered tools now enable collections teams to gain a deep understanding of each debtor's financial situation, history and preferences. This knowledge allows them to tailor their communication and payment arrangements, demonstrating empathy and a genuine desire to assist. In addition, automated reminders for upcoming payments or overdue bills can be sent, reducing the need for aggressive and intimidating collection calls. Debtors are more likely to appreciate friendly reminders than unwelcome surprises.
Incorporating these digital enhancements into the collections process not only improves efficiency but also humanizes the interaction. Debtors are more likely to cooperate and fulfill their obligations when they feel understood, respected, and supported — a vital connection in a rocky economy, and this is just one example. There are numerous other avenues where digital innovations can be applied to foster deeper, more empathetic connections with clients, partners and employees.
Achieving the balance
Today’s financial leaders stand at the intersection of data-driven innovation and the age-old power of human connection. As they embrace the digital revolution and navigate economic uncertainties, they are reaffirming that while the tools at their disposal continue to evolve, the essence of their most valuable asset, human connection, remains steadfast.
Of course, these tech tools will prove increasingly essential as finance teams are tasked with protecting their organization’s financial health in a recession. This will require a delicate balance between leveraging the power of digitization and fostering personal connections. In this environment, CFOs must recognize that their responsibilities extend beyond mere financial oversight or risk aversion. They are, at their core, architects of relationships and effective communicators, crucial in steering their organizations through both technological advancements and economic challenges.