CFO Survey Results: Priorities and Action Plans 2022

Cost optimization remains the top priority for CFOs despite all the other hats  they don as modern CFO. 56.4% of finance leaders mention that cost  optimization is a top priority for their business. Across the survey, on various  questions such as parameters for choosing software and reasons for  automating, lower costs figure as a prominent reason for the various decisions  that CFOs take. 

Next to cost optimization, data-driven decision making and reducing risk are  the other top priorities for finance leaders. The growing volumes of data and the  importance of using it for predicting future events make analytics a growing  field of interest for CFOs. Predictive analytics, machine learning, and artificial  intelligence are increasingly used by finance teams for risk management, fraud  detection, budgeting, and reporting.  

Managing risks becomes essential to mitigate revenue and asset loss. Due to the  increased emphasis on financial risk management and prevention of  cyberattacks and data breaches, finance executives need to keep a tight tab  on operations, data management and handling, and predicting, identifying, and  thwarting risks.

We also asked CFOs whether their focus on areas such as financial accounting,  expenditure planning, and talent acquisition have decreased or increased in  2021 and 2022. Despite CFOs donning new hats, a majority of the finance leaders  mention that their focus on core areas such as financial accounting (59%), cash  and revenue forecasting (42%), budgeting (46%), compliance management  (43%), and financing activities (45%) will increase in 2022.  

27% of the CFOs felt that their focus on financial analysis will diminish in 2022  while 23% feel that their focus on strategic planning will be lower. CFOs’ focus on  M&A activities in 2022 is also slightly higher than in 2021 (33% vs 30%), indicating  a renewal in economic and market prospects.

With revenue growth expected to be over 10% for most businesses, CFOs need  to prepare for processing and managing a higher number of invoices as well  as customers.  

Cash reconciliation errors (36%), credit management (34%), and lack of skilled  resources (35%) are the top challenges that finance leaders face in managing  accounts receivables, in addition to scaling for growth (44%) and maneuvering  outdated technology or slow manual processes (42%). 

Automation is the way to achieve scale. The biggest benefits CFOs expect from  AR automation are improved working capital management (44%) and  improved transparency into cash flow (43%). Other benefits expected from AR  automation include reduced errors, increased AR capacity, and the ability to  accept digital payments (35%). 

86% of businesses say improving AR efficiency is a potential source of cost  savings (53% say it is a very significant potential source of cost savings). 

AR Automation Technology

56.5% of SMBs say they currently use accounting software for AR management.  42% also use spreadsheets to manage AR, often along with other tools.  

But utilization of ERP solutions for AR management was much lower with only one  out of four (26%) finance leaders saying their business uses ERP for AR  management. Businesses with higher revenues (> $100 million) also use CRM  tools (48%) compared to only 29% of smaller businesses (<$100 million revenue). 

Within the AR function, as many as 47% of the businesses have automated their  invoicing processes. 33% of firms are also looking to automate invoicing in 2022.  An equal number also mention that they want to automate their cash  application or reconciliation process.  

Credit risk management and collections management also offer significant  potential for automation with ~30% of businesses mentioning that they plan to  automate these processes. 

The below table looks at the percentage of businesses that have already  automated the different AR and finance functions as well as their automation  plans for 2022.

Digital payment options will significantly impact receivables operations in the  next 2-3 years, according to 38% of the finance leaders that we surveyed. Data  analytics (35%) is the other area that most CFOs feel will significantly impact  their receivables operations.  

Here’s a chart depicting what mid-market finance leaders believe will be the  technologies that’ll most significantly impact accounts receivable operations in  the next two to three years.

86% of the businesses believe that implementing AR automation technology is  either very important (63%) or important (23%) to keep pace with competitors.  Competitors providing superior customer service (41%) is one of the main  implications of falling behind the curve in terms of adopting AR technology. 

AR Outsourcing vs AR Automation

Outsourcing AR function to a third-party vendor is another route that businesses  take to tackle AR management. 66% of the respondents said they’ll  be outsourcing AR to an offshore low-cost staffing provider. 41% mention that  they’ll be fully outsourcing their AR function while 25% say they’ll  partially outsource. 

When asked why they’d outsource their AR function, 41% say it helps them scale  quickly. 40% of the respondents also mentioned that it is too costly to  implement AR automation with their existing legacy systems. 36% said the  nature of their business doesn’t lend itself to automating while 20% said  outsourcing helps them lower costs.

Investing in SaaS/automation/AI/other digital technology is a priority for  two-thirds (65%) of the CFOs, with 36% of them saying it’s a top priority for them.  Data-driven decision-making, most often enabled by AI algorithms and big  data mining tools, is also a priority for 70% of our respondents. 58% of the CFOs  say the lack of modernization of IT can be a big risk to being able to achieve their  2022 goals and 68% of them believe outdated technology stacks are negatively  impacting their business efficiency. 

The pandemic hit the cash flow of many small and mid-size businesses and  they were forced to shut shop. Offering electronic payment options (34%),  sending invoices immediately (37%), and doing better customer credit checks  (37%) are the top measures that CFOs plan to take to improve cash flow. And  technologies such as AR automation can help here. 71% of CFOs mention that  slow manual processes or outdated technology is a challenge in managing  accounts receivable, a key part of the cash flow process. Scaling for growth (67% 

of respondents say it is one of the key challenges in managing AR) can be  difficult without automation tools in place. 

When asked specifically which AR functions they place to automate in 2022,  most CFOs mentioned invoicing, cash application or reconciliation, and  collections. Invoicing is the most automated function, followed by deductions or  dispute management, and cash reconciliation. ~43% of the firms also mention  that they have already automated reporting and tax management. 

Limited technology skills are the biggest skill gap that CFOs face in their AR/AP  teams. 80% of CFOs say they plan to upskill or train employees to reduce this skill  gap while 78% say they intend to empower their employees with the relevant  tech tools. 

CFOs also see technology investments as a potential means to differentiate  their business from competitors and provide customers with unique selling  points that enhance their experience. Thus, 4 out of 10 CFOs agree that falling  behind the curve in adopting AR technology leads to customer frustration (42%)  and competitors providing superior customer service (41%).

Respondent Profiles