AR Automation Advant-EDGE – The must-have for scaling businesses

Madhurima Gupta:
Hi! Welcome to the Mid-Market CFO Circle Live. I’m your host, Madhurima Gupta. On Mid-Market CFO Circle Community, we bring you peer insights on technology trends, prediction, and the potential cost of not implementing automation and emerging technology for its digital transformation and overcoming pressing business challenges at the office of the CFO. Thanks for joining in today. Where are you joining from? I’m joining in from Hyderabad, India. So I’m really excited today to host two of our really amazing speakers that are CFO office experts. And I promise you a very exciting conversation today with Bruce Braviroff and Sayantan Datta. So let’s start with the introductions. Uh, so first I have Bruce Braviroff with me, uh, who has been providing fractional CFO services to a variety of companies of varying sizes, each of them having their own unique needs and challenges. And this is something that he’s been doing since 1994. He’s currently the interim CFO at Your CFO as well, right, where he helps businesses to mend, their old and, establish new relationships that are essential for the natural growth and development of any business. He helps these businesses identify exact pain points, find solutions and create a path that’ll ensure success and market share for them.
Bruce Braviroff:
Thank you for having me. I appreciate it.
Madhurima Gupta:
Next, I’d like to introduce Sayantan Datta. Sayantan has over 17 years of business process transformation experience across enterprise functions, including about more than a dozen years of experience in transforming customers to cash operations for global organizations. He has set up and currently leads order-to-cash transformation practice at Accenture Operations. Sanyantan started his career transforming fulfillment assurance in billing operations for global telcos. And right now he’s working cross-industry finance transformation, where he has driven numerous transformation journeys over the last decade. Hey Sayantan, welcome to the CFO Circle.
Sayantan Datta:
Thank you. Thanks for the great introduction.
Madhurima Gupta:
So welcome to the show Sayantan and Bruce. I’m looking forward to having a great conversation with both of you. So in this session, we’ll be diving deep to get insights from peers, focused on optimizations and automation strategies that work for growing mid-market CFO offices. The idea is to understand the areas that CFOs should focus on while they build scalable finance functions that are capable of catering to expensive business growth. So, Bruce, my first question is for you. With digitization becoming a mandate in CFO offices in 2022 and beyond, um, there is a dilemma on what should CFOs be solving, right? Whether they should be concentrating on growth through digital initiatives or whether they should be focused on, um, putting the organization’s financial health first, right by cutting costs. So what would you say should be the approach, uh, for the CFOs?
Bruce Braviroff:
I think the CFO should be focused on assisting in sales growth, but that’s not, you know, to me, the CFO, I think of it as a structure and the facade is the sales and all of the stuff that faces out that the client sees where what the CFO does is the structure that keeps that facade standing. And I think that as a CFO, you should be reviewing all of this stuff. You should be focusing on it annually. It’s not, you know, we, we sit down every year we re-shop our insurance is, well, why are we not re-shopping our services at the same time? And I think that it’s just staying with technology or even a little bit behind is still going to improve 90% of the companies.
Madhurima Gupta:
How do you think CFO offices can accelerate their finance function with the help of software technology, like an AR automation tool?
Bruce Braviroff:
I think everybody needs to be looking at that. The better job you can do on controlling your accounts receivable and your turns, the better off you’re gonna be. And these auto automation programs help you keep control and prove your income. And they also give you a little bit better view of what’s going on a little bit more granular view. I think right now we’re, you know, I’ve been doing this forever and the systems are just getting more and more automated, better, better inter interchange with each other. And I think it’s, you know, if you did something three years ago and it’s working great, that doesn’t mean you’re still doing the best thing you can be doing. You need to be looking at this pretty much annually to make sure the new that you’re keeping up with technology and finding ways to save you money.Because a lot of it is just people get lazy or complacent. You know, the phone systems worked great for 25 years. Oh, what do you mean? I’m spending a thousand dollars on something I can get for $25. You know, those are the issues that you have to look at, is how do my cost save? How do I get more efficient? And really technology is getting better and better. I mean, I’ve got, I know a couple of people with smaller companies running out of these things, you know, their entire company, they run out of cell phone and it’s a smaller company, but they’re doing a great job and it’s, but they’ve automated. They use as much automation as they can, and that will save them with people too.
Madhurima Gupta:
Okay. So as we discussed, uh, more and more CFOs are increasingly emphasizing on moving or automating their AR processes post-pandemic. Is that something that you’ll agree with?
Bruce Braviroff:
I actually think it’s, we are looking more and more at automation since the pandemic. We discovered we can send people home. I’ve seen most of my people get more work done at home, be more efficient. So that allows me to spend a little bit more time doing these things that makes the whole system efficient. And I think that over the next year or so, focusing on automation in everywhere in your business is going to be not just, um, something you need to do, but it’s going to change the way business runs.
Madhurima Gupta:
Interesting. Uh, next I’d like to ask a few questions to, uh, Sayantan. So Sayantan, um, do you think that there are some mistakes that CFOs should be varying of while planning their, AR automation strategy in 2022?
Sayantan Datta:
What we’ve seen in the last two, two and a half years in my personal experiences, through my interactions with finance leadership. There are three things that stand out agnostic of, you know, size, industrial scale, which market you’re operating, uh, that kind of, we need to avoid going forward if we are to achieve the desired outcomes, right? The first one is taking a fragmented approach, right. Something in the overall value chain feels broken, something is taking more effort than it should, let’s go and fix that with digitization. That generally leads to a lot of plug-in-play technology that in the medium, in the long run, as the organizations tend to grow, you will change ERPs. You will upgrade software and hardware and infrastructure and it’ll cause problems. I’ve seen this in many companies who are beyond mature stage of growth. I’ve seen this in companies who are just starting up and beginning to see explosive growth that they land into these challenges because of a fragmented approach. The second most important thing that we should not ignore is data, right? Data, quality, data, integrity, data sufficiency, and then overarching robustness of the data landscape and governance will directly impact the entitlement of any automation and digitization initiatives. Right? If I do not focus on say my customer data, if I do not focus on making sure that the hierarchies are right, my entire accounts receivable process is gonna suffer. Doesn’t matter what technology I put in place for it. If my pricing isn’t right, I will end up getting disputes. Doesn’t matter what technology I put, uh, to fix, you know, the efficiency of it, right, because I’ll still be sitting on a lot of disputes. And the last, uh, important thing, uh, is, is not to adopt a global template philosophy, right? Because business tends to, um, operate in different channels to different customers. It’s, uh, growing in different directions. There are new products coming in. Nowadays more than ever the new collaborations and new partnerships that we’re putting in place, if you take one global template and expect the business to standardize the one place, it always fails is in the accounts receivables right. Um, so we need to be able to design, um, a solution that caters to all the variations of business and sort of a corollary of all of this is our approach should not be technology-driven, right? I should not be picking one platform, one ERP, one solution and then trying and force-fitting all, uh, data, my processes into that sort of template. This is the age of composable solutions, right? The best answer may be in option B, option C. We can stitch together, given the advances we’ve made in integration technologies. Uh, but let’s focus on design, right? The design that needs to be driven by domain design that needs to be driven by my data visions and design that is led by process considerations. Those are the things that we really need to focus on, uh, and, and not to do wrong, uh, to be able to get the entitlement we’re looking for.
Madhurima Gupta:
Perfect. That sounds good. Um, so growing midmarket CFOs are already eyeing automation, right? So what are the key processes they should focus on to build a full-proof plan in your opinion?
Sayantan Datta:
There is no one right answer to this question, right? I mean, it’s, it’s a great question. It’s something that a lot of people struggle with and I’ve seen this struggle happen, not for, you know, platforms, but even when deciding on where should I put my robotic off process automation, even if I’m trying like three bots in the process, right? So, which is the right place to start so that, you know, I can grow and scale. Uh, it depends a lot. It depends on the culture of the organization. It depends on where the pain is, where the scale is. And most importantly, I’ve seen, um, instead of picking the hardest problem, first, it’s better to pick the most optimum problem where you’ll get some success and the probability of success is high, right? Whichever that is maybe it’s a transactional process like cash applications. Yeah, sure. Um, if there’s enough entitlement for an outcome and there is a high probability of success in terms of, I control the inputs and to the process, yes. I’ll pick cash applications. But if it’s not the case, right. I don’t have the integrations with my bank ready. It’s not at the right state of maturity. Let me look at something that I can control a little better, right? Let me go further upstream and control master data. Let me go and control credit risk management. Whichever makes the most sense from a point where I can get some good outcomes and initial success that then I can help use to feel, uh, you know, further scalability. So that’s, that’s sort of a factor in, you know, which, which process you choose. The other thing that is important to remember, especially midmarket companies in, you know, an accelerated growth phase, there are always like a hundred different priorities going on in the organization and all of them are interdependent. So my choice, um, should ensure that my transformation doesn’t stall because the whole organization suddenly pivots to focusing on something else or my choice should not stall growth, right? So it’s, it’s, that fine balance that you have to pick during the growth phases, because I don’t want to start putting a very complicated solution. And my organization suddenly takes a pivot. It acquires a fairly large organization, goes into a wholly new market, and I’m not ready to onboard the market or onboard the, uh, acquisition that I’ve just made that will make life more difficult. So again, it needs to be tied to at least the medium-term plan in terms of where the organizational growth is happening. And then I choose which process, which area, which market, which business, um, to, to make sure there’s that, that has the maximum chance of success. And it kind of to some extent becomes self-propelling by generating sufficient outcomes and savings from the implementation.
Madhurima Gupta:
Yeah, that’s interesting. So, uh, Bruce, uh, how about building analytics? Right. I wanted to understand why is it important or why should a mid-market CFO office, uh, be focusing on advanced analytics to get today? And how do you think these analytics prove to be of real business value or what kind of business value do they offer to the CFO’s office?
Bruce Braviroff:
Incredible that if you’re not taking advantage of it, I think you’re passing up. You know that I tell my clients is if you don’t think you’re drowning in information, you don’t have enough. You have to filter through how much information you can get today. And if you focus on that and use that information properly, your company’s gonna do a better job and it’s sitting down and I mean, the analytics are great, but somebody’s got to sit down and read them. My personal experience, I’ll get the analytics all done and then spend a week to two weeks chasing the CEO, sit down and have a conversation about these analytics that they’ve gotten for. So it’s timing, but staying on top of it’s important. You know, there are a lot of real, really good programs out there, lot of really good applications out there to do this. And you have to, uh, part of it, you know, you can have a great program, but it has to be easy to use. And ease of use is one of the things that I really look at because we don’t wanna have to spend a week on my it’s retraining somebody, how to use this stuff. It has to be pretty simple. It’s gotta give really good timely reports, which is what I expect from everything today. And the reports have to be pretty much customizable to what you wanna see because everybody looks at, you know, everybody follows something different, it’s it, everybody thinks that every company runs the same and accounting, accounting know, everybody chases a particular raw material or piece of information that they feel is necessary to track.
Madhurima Gupta:
Yeah. I can’t agree more, um. So Sayantan, you know, coming back to you. While putting together a digital transformation plan, what weightage do you think CFOs should give to the expected business growth, and why?
Sayantan Datta:
Depends on which stage of growth you are in, in the business life cycle. If you’re at the, you know, sheet down state, there’s a different thing. You gotta think if you’re in a maturity stage, there’s a different thing. When you’re, you know, going for a life cycle extension, there’s a different, um, but if you make a list of 10 things, um, it should not be lower than number three. Right? Um, and, and that’s because you know, your transformation, as I mentioned somewhat before, right? Your transformation is going to either stall because of other initiatives going on in the organization, right? You suddenly, uh the organization might get acquired or decide to acquire a whole, you know, different business into the whole different market. And there is a possibility that will stall my transformation. The other thing that can happen is because I’m doing this transformation. So for example, let’s assume that I’m implementing a platform and my business is largely focused on, you know, North America, Western Europe, as a business, we decide to now expand into APAC, right. And, you know, Southeast Asian countries, uh, uh, they have their whole regulatory and language complex. You know, if I haven’t factored that into my design, I will never be able to onboard that market into whatever solution I, I have, uh, in place in terms of technology, in terms of process, in terms of templates, right? So factoring in that growth plan will enure that my choice of solution, and remember, I’m saying my choice of solution, not technology is agile enough. It’s scalable enough. There is enough speed to market to be able to onboard. Uh, it has adaptability the moment I add the new language, how soon can I onboard that market? How, um, well, can I adjust to the nuances of that language, whether it’s, uh, written left to right top to bottom. It, it makes a lot of difference in transactional processes, which depend on language-based input. In the middle east when you’re getting bank statements, which are not in English if or remittance advices that are not in English, will my cash applications process stall, or do I have translation engines enough to be able to extract data? Correct. Right. So that’s, that’s why the growth, uh, you know, the growth plan or the growth strategy is very, very important and should never be lower than at least, you know, number three, I’d put it at number two.
Madhurima Gupta:
Bruce, would you also like to answer that question?
Bruce Braviroff:
That’s a, uh that’s a hard question to answer because, uh, I’ve got, you know, all of these clients that I’m dealing with and one’s growth is here and one’s growth is here and you have to look at what your growth is. I mean, I’ve got one company that’s grown 50% year over year, uh, astronomical growth. And we, we have a lot of time spent trying to make sure we’re doing everything right. I’ve got others that if we get 4%, they’re thrilled. So it just depends on the company’s growth. You know, you’re either going up, you’re going down as far as I’m concerned. So growth is something you need to have at what level that’s up to you. It’s, you know, you have to determine. The guy that’s grown at 50%, he lives eats drinks, this stuff, 24 hours a day. The guy that’s growing at 4%, goes to the river every weekend to play in his boat. What’s important to you, where do uh, what growth do you want?
Madhurima Gupta:
So Sayantan, can you describe some of the dependencies that CFO offices have built, that they should be moving away from?
Sayantan Datta:
Being able to do my, um, my invoice offset, right? I am dependent on the supply chain to send me my, um, my proof of delivery or send me my returns information on time, right. To be able to collect from a customer. My, uh, contract data is just sitting with customer service needs to be available to me. Otherwise I’m dependent on them. So data dependency is driven by organizational boundaries is a massive, uh, growth of us. And it’s not really a CFO responsibility. It’s how finance gets set up over time. Um, especially in, you know, high growth phases, finance becomes an enterprise support function instead of a partner. And therefore you end up in this place where finance is basically responsible to do all the accounting and the rest of the organization is focused on growth. Now it doesn’t take very long for concerns of compliance, for concerns of working capital to catch up because selling no matter what eventually ends up in a, in a significant amount of mess, that retroactively is very difficult to solve.So that’s one very big dependency that needs to take care of the other pieces, a dependency on trivial knowledge. Um, I have a team of 10 people, uh, for, a relatively small customer base in the space. Uh, my collector really knows my customer, right. And, and the way they want their things to happen, the frequency at which they want their account statements, uh, being sent to them when they want their reminders. When you lose that person, you lose the relationship with that customer. And that customer could account for 5% of your revenue, which means that you are opening yourself up to potential, you know, past due working capital risk. At worse, you’re leading up to revenue risk, right? Because at the end of the day, the customer is dissatisfied and you have to end up writing it all, that’s a direct hit to your or PNL, right? So it’s important to be able to remove dependencies on individual people. It’s always a people, uh, business, right? So it’s not that you get rid of people, but you should not lose knowledge because loss of knowledge, poses a greater risk as loss of revenue or, you know, your defaulting customers. So those are, you know, sort of two things that in my experience we need to focus on, um, in terms of what dependencies should I attack when I need to sort of design for the next, uh, phase and transformation next phase. And
Madhurima Gupta:
That’s true. Uh, I can’t agree more. Bruce, can you tell us, uh, how CFOs are giving their teams a chance to upskill with automation in place and what kind of impact does this have on overall functionality in a finance function?
Bruce Braviroff:
Yeah, I think it’s really interesting because you used to have an AP and an AR clerk. Okay. Those people, all they did was input well, now the machine does that. So these people are now working at a higher level on more support of the overall accounting. So I’ve taken my accounting department and they’re accomplishing a lot more, but they’re not doing this work down below because the machine’s doing it. And it’s just, that’s one of the things of better use of your manpower because you, you freed them up from something that’s just, you know, sitting there. I mean, I remember watching my AR person years ago, sit there and each day, you know, every, they gotta go through and do it all manually. And that’s all, they did eight hours a day. And if you can free an employee up from doing that now, what can you use that employee to do in the way of reporting in the way of projections and all of those other things, you free up your employees, and now you can use them for things you didn’t have time to use them for before.
Madhurima Gupta:
So Sayatan, what about those companies which are comfortable with a particular kind of software that they’re using and they don’t wanna move forward? Uh, do you think that this hinders and, you know, the ability of the entire CFO office to scale as the company grows?
Sayantan Datta:
As long as there’s a plan, right? I mean, yes, we should not get comfortable on our laurels, which is, you know, age old cliche, but, um, as long as there’s a plan to continuously improve, whether that improvement, uh, happens in big jumps or small incremental steps, right. Uh, fixing my, um, data strategy is a small incremental step because, but if I get that right then that pain that I think I’m going, going to feel when I switch from one technology of comfort to another technology will be significantly reduced. Right? Because if you think about it, when we, uh, when you talk to CFOs, when you talk to financial leadership and you start to lay out dependencies and risks, these become biggest dependencies, right. Is my organization mature enough to undertake something like this? Do I have the right digitized data? Is my data structured enough to work with it? Do I have processes that follow at least some semblance of rules, right? These are all small incremental things that you can do towards getting to that readiness where I can take the next leap. So as long as there is a blueprint to get there, it’s, it’s okay to take it slow, right? We,uh, because if you rush into it, I said that, yes, I have a great, but it’s not gonna be doing anything. I’ve seen plenty of platform deployment with the platforms there, right? It’s a great key study and a showcase, but all the teams are working around it, right. That because they want to create so many workarounds, uh, because I’ve driven a platform into a design where, you know, contextually, I was not ready for.
Madhurima Gupta:
Interesting. That’s a great observation. So now that you’re at the end of the session, what would your, uh, respective parting thoughts or recommendations be for CFOs who are rethinking their finance function to cater to business growth in 2022 and beyond?
Bruce Braviroff:
I, I have a friend who sells to CFOs, and his quote about all of us is we’re the last people in the world to adapt to new technology. And I’m not that guy, I want to be the first guy or the, not the first, maybe the third. Uh, but I think that techn adapting technology and being prepared for change is, is the biggest thing a CFO needs to be doing right now. And if you, if you’re saying, Hey, our accounting works well. Yeah, it works, but is it right? Can you do a better job? Are you getting the growth information or the accounting information or whatever information you need, out of the system, the way you need it? Are you doing it as efficiently and as cheaply as possible? You know, handling a check to me and I, I love this. I, I try never to touch a check cause it’s just like, it’s a cost that I don’t need. And it’s so much more efficient to use an electronic system that’s managed properly than gee. I have to go deposit a check. I, I mean, I don’t even have a checkbook anymore. If you still want to do this, the old-fashioned way have at it. But I don’t think you’re going to get to where you wanna be iIf you don’t make some changes and learn how to do these things more efficiently
Sayantan Datta:
Design, right. Make sure that the Intel context is built into the design line. Once we have that, what technology I choose will really not matter because at the end of the day solving a particular problem and there are many different ways to solve that problem. So, uh, you know, sometimes I, I talk to, uh, finance leadership and everybody wants to experiment with AI or somebody wants to touch on blockchain. If I don’t have a design, right, if I don’t have my data strategy in place, AI, blockchain, nothing’s gonna work. We, we all have, uh, great implementations with no results, right? So that’s number one, right? Number two. And I mentioned this, that the growth plan, the future strategy needs to be factored into that design is one of the important things I, because growth for, you know, a Fortune 500 company, if they grow into a new market or a new product, the net impact of that is really small in their overall portfolio. But for midmarket companies expanding into a new product, a new market, a new group of customers or a new price segment is a significant impact on their overall portfolio. Right? So my ability to, you know, my, my transformation needs to have the ability to flex, to adjust, right. And the third is we need to pick the right business outcomes to measure success because its accounts receivable doesn’t mean day sales outstanding needs to be the most important metric. No, it is the most important metric would be compliance. The most important metric would be, you know, revenue leakage, the most important metric, uh, of success really be customer experience is, is have I been able to establish the relationship because at the end of the day, if I’ve sent my invoice out to my customer at the right time, in the right configuration with the right information, I will get paid, um, nine times out of 10, right? It’s it depends on what outcome really matters to the business I’m in and to my customer. And we need to focus on making that the measure of success instead of just focusing on, um, efficiency and, you know, headcount terms and the one thing that can be benchmarked against, uh, the rest of the world. So those are my sort of, you know, three summary thoughts based on, in, in, in terms of driving transformation, across organizations, finance organizations.
Madhurima Gupta:
Great. Uh, thank you so much for your time, Bruce and Sayantan, and it was great speaking with both of you. Uh, I’m sure our listeners, uh, have learned a great deal from this session and especially the ones that are planning to scalably, uh, you know, enhance their finance function. So thank you so much for your time. And for listeners out there, uh, you can tune into our complete episodes with our guest speakers on the links in the comment section below. We’ll be back next month with another roundup of industry stalwarts and thought leaders. In the meantime, you can subscribe to The Mid-Market CFO Circle Community to never miss an episode, so say it tuned. We’ll be back with more.