Chief financial officers who promote forward-thinking ideas will be more likely to achieve their goals. How to set those ideas into motion, however, can be challenging. Here, Rita Hubner, vice president, solutions consulting and advisory services at Bottomline Technologies, addresses the issues, execution strategies and implementation processes CFOs should consider to help move concepts around talent, visibility and cloud migration from idea into action.
Assembling a dream team
CFOs won’t get far without the help of a talented and trained workforce. These days, that means looking for employees who are financially astute as well as technologically proficient. “Oftentimes the finance team will be drawn upon to be subject matter experts when the organization is in transformation,” Hubner said. “Looking forward and implementing systems in that realm require command of the business and financial processes to properly implement end state. How data will be presented, what data is needed, what dashboards make sense, what payment patterns exist — these all lay into the next phase of finance transformation.”
Focusing on essential priorities
According to a recent Bottomline Technologies/Payments Dive survey, CFOs list three elements as important priorities moving forward. These include:
A better view into cash and liquidity (80%): To make this dream a reality, Hubner said, CFOs should leverage technology that will help manage and improve working capital performance. “CFOs should look past spreadsheet-based techniques to proactively tackle late payments and improve receivables inflow,” she said. “This allows for less borrowing and stronger cash positions.”
Better access to real-time data (80%): Most cash analytics is performed on offline spreadsheets with significant data latency. “Lack of real-time analytics limits optimization of payment schedules, thereby reducing overall cash,” Hubner said. She added that the rise of ISO 20022 as a messaging format will add high-quality data to the equation and will require an automated approach to analytics.
A more integrated view of payables and receivables (72%): CFOs should start by understanding cash inflows and outflows to improve cash flow forecast accuracy. “Seeing both sides of the story will help you to understand where to focus effort,” Hubner said. “For example, options might include accelerating collections, managing unforeseen large expenditures and optimizing supplier payment schedules. Building views into your payables, receivables and cash positions by integrating your ERP or accounting system via API is very powerful for more accurate cash forecasts.”
Avoiding cloud-migration obstacles
Almost all CFOs in our survey (96%) strongly agreed or agreed that technology such as SaaS/cloud-based technology played a big role in strengthening the integration and/or whole picture of cash at their companies, while two out of three (65%) reported that cloud usage was a high priority in their organization’s plans for investments in the next 12 months. Preparing for and avoiding forthcoming obstacles with regard to cloud integration can help CFOs more seamlessly achieve these goals. For example, “the largest obstacles to implementing in the cloud are disparate legacy systems,” Hubner said. “SaaS-based platforms that accept data in multiple formats are best poised to succeed for their clients.”
Staying ahead of the curve
Our survey found that CFOs generally feel they have a good handle on the issues at play and that, despite the need for better focus and investment in some key areas, their current view across cash is either excellent or good. And yet, CFOs also understand that they can’t let their guard down, particularly in this economy. “The recent uncertain economic conditions, high inflation rate and tightened monetary policy by the Federal Reserve will make managing cash even more important over the next 12 to 18 months,” Hubner said. “Improving working capital performance can have a significant impact on any business.”
As the business world continues to quickly evolve, Hubner predicts that finance leaders will continue to focus on digital transformation through things such as “connected finance,” cash flow forecasting, AR-AP automation and other projects that help position their companies for success.
For more on the current state of the office of the CFO — including how they view their current operations and what they see as priorities for the future — read the full Bottomline Technologies/Payments Dive survey “Connection. Visibility. Data. How CFOs Should Prepare for Success.”